2011-Audit

2011-Audit

Document Date: January 1, 2011 Document: 2011-Audit.pdf

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COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2011

CounTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2014

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS

INTRODUCTORY SECTION

Page List of Elected and Appointed Officials … 1

FINANCIAL SECTION

Independent Auditors’ Report … 2-3 Management’s Discussion and Analysis … 4-14

Exhibit Page Basic Financial Statements:

Government-wide Financial Statements: Statement of Net Assets … 1 15 Statement of Activities … 2 16

Fund Financial Statements: Balance Sheet – Governmental Funds … 3 17

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets … 4 18 Statement of Revenues, Expenditures and Changes in Fund Balances –

     Governmental Funds ...................................................................................................................  5 19

Reconciliation of the Statement of Revenues, Expenditures, and Changes

     in Fund Balances of Governmental Funds to the Statement of Activities  ...................................  6 20

Statement of Net Assets – Proprietary Funds … 7 21

Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds … 8 22

Statement of Cash Flows – Proprietary Funds … 9 23 Statement of Fiduciary Net Assets – Fiduciary Funds … 10 24

Notes to Financial Statements … 25-63

Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual - General Fund … 11 64 Budget and Actual - Special Revenue Fund – Industrial Development … 12 65 Budget and Actual - Special Revenue Fund – Coal Road … 13 66 Budget and Actual - Special Revenue Fund – Workforce Investment Board… 14 67 Budget and Actual - Special Revenue Fund – Rental Assistance … 15 68 Schedule of Pension and OPEB Funding Progress … 16 69

CounrTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FiscAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS INTRODUCTORY SECTION Page List of Elected and Appointed Officials…mmnnnnnnnnninnnnnnnnnnnnininnnnnnee 1 FINANCIAL SECTION Independent Auditors’ RepOft …n1::tsnnnnnnnnninnsiinnnnnnnnsnnnsinnnnnness 23 Management’s Discussion and Analysis. 414 Page Basic Financial Statements: Government-wide Financial Statements: Statement of Net ASSES …onnnnnnee sennnnees 1 15 Statement of ActiVitieS…00::mnnnnnnnniinnninnnnninnnininnnnnennnnnnnn 2 16 Fund Financial Statements Balance Sheet - Governmental Funds 30017 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 4 8 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds… 5 19 Reconciliation ofthe Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities …usccsnnnnmnnnn 68 20 Statement of Net Assets ~ Proprietary Funds. 7 2 Statement of Revenues, Expenses, and Changes in Fund Net Assets —

Proprietary Funds … 8 22 Statement of Cash Flows — Proprietary Funds . 9 2B Statement of Fiduciary Net Assets — Fiduciary Fund: 1024

Notes to Financial Statements… 25-63 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General FUNG…rnrnnnnnnnnnnennnnn att 64 Budget and Actual - Special Revenue Fund - Industrial Development… 12 65 Budget and Actual - Special Revenue Fund - Coal Road… . 1366 Budget and Actual - Special Revenue Fund - Workforce Investment Board 1467 Budget and Actual - Special Revenue Fund - Rental Assistance 15 68 Schedule of Pension and OPEB Funding Progress… 16 69

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS (CONTINUED)

Other Supplementary Information Section:

Exhibit Page

Supplementary Financial Statements

Statement of Changes in Assets and Liabilities – Agency Funds … 17 70

Discretely Presented Component Unit – School Board:

Balance Sheet … 18 71 Statement of Revenues, Expenditures, and Changes in Fund Balances –

Governmental Funds… 19 72 Schedule of Revenues, Expenditures, and Changes in Fund Balances –

Budget and Actual … 20 73

Schedule Page Supporting Schedules:

Schedule of Revenues – Budget and Actual - Governmental Funds … 1 74-79

Schedule of Expenditures – Budget and Actual - Governmental Funds … 2 80-83

Other Statistical Information: Table Page

Government-wide Information: Government-Wide Expenses by Function … 1 84 Government-Wide Revenues … 2 85

Fund Information:
General Governmental Expenditures by Function … 3 86 General Governmental Revenues by Source … 4 87 Property Tax Levies and Collections … 5 88

Assessed Value of Taxable Property … 6 89 Property Tax Rates … 7 90 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita … 8 91 Ratio of Annual Debt Service Expenditures for General Bonded Debt to
Total General Governmental Expenditures … 9 92

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FiscAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS (CONTINUED)

Other Supplementary Information Section:

Exhibit Supplementary Financial Statements

Statement of Changes in Assets and Liabilities - Agency Funds…

Discretely Presented Component Unit - School Board:

Balance Sheet… — 18 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds. 19 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and ACIUAL…s.nssnmnnnniinininnininninninnnnnnninnnnnninnnnen — 20 Schedule ‘Supporting Schedules: Schedule of Revenues ~ Budget and Actual - Governmental FUNGS …rnenenininninennenene — 4 Schedule of Expenditures ~ Budget and Actual - Governmental Funds 2 Other Statistical Information: Table Government-wide Information: Government-Wide Expenses by Function 1 Government-Wide Revenues… 2 Fund Information: General Governmental Expenditures by Function. 3 General Governmental Revenues by SOUICE…sununinininnninninnnnnnininnnnnnnnnes Property Tax Levies and Collections… 5 Assessed Value of Taxable Property… 6 Property Tax Ral@S urine a 7 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita. nnnnsnninininninninininnininnnniniinininninnnnnnnens 8

Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures 9

Page

a 72 73

Page

74-79 80-83

Page

86 87 88 89 90

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS (CONTINUED)

COMPLIANCE SECTION Page

Compliance:

Report on Internal Control over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards … 93-94

Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct
and Material Effect on Each Major Program and on Internal Control over
Compliance in Accordance with OMB Circular A-133 … 95-96

Schedule of Expenditures of Federal Awards … 97-100 Schedule of Findings, Responses, and Questioned Costs … 101-105

CounrTy OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FiscAL YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS (CONTINUED)

COMPLIANCE SECTION Page Compliance: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 93-94 Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A133… 95-96 Schedule of Expenditures of Federal Awards… 97-400 Schedule of Findings, Responses, and Questioned Costs… 101-105

INTRODUCTORY SECTION

COUNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS

Danny L. Brown, Chairman Billy Wayne Wampler, Vice Chair Jon Bowerbank Bob Keene Earnest (Shy) Kennedy Joseph Puckett

COUNTY SCHOOL BOARD

Carl Jackson, Chair Charlie Collins, Vice Chair Bob Hillman Fayrene Plaster Linda Cross
Tom Griffith

SOCIAL SERVICES BOARD

Harry Ferguson, Jr., Chair Bill W. Wampler, Vice Chair Roger Brown Bill Hale

OTHER OFFICIALS

Clerk of the Circuit Court … Ann S. McReynolds Commonwealth’s Attorney … Brian Patton Commissioner of the Revenue … Randy N. Williams Treasurer … Patrick Thompson Sheriff … Steve Dye Superintendent of Schools … Mike Puckett Interim Director of Social Services … Carol Brunty County Administrator … Marycarol White County Attorney … Dennis Jones

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CouNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS

Danny L. Brown, Chairman Billy Wayne Wampler, Vice Chair

Bob Keene

Joseph Puckett

Jon Bowerbank Earnest (Shy) Kennedy

COUNTY SCHOOL BOARD Carl Jackson, Chair

Charlie Collins, Vice Chair Bob Hillman Fayrene Plaster Linda Cross Tom Grifith

SOCIAL SERVICES BOARD

Harry Ferguson, Jr., Chair

Bill W. Wampler, Vice Chair Roger Brown

Bill Hale

OTHER OFFICIALS

Clerk of the Circuit Court… Commonwealth’s Attorney Commissioner of the Revenue THe @SUFEF ssn Sheriff. Superintendent of Schools Interim Director of Social Services… County Administrator… . County Attorney …nniinnstnnnne

… Ann S. McReynolds Brian Patton Randy N. Williams Patrick Thompson Steve Dye

Mike Puckett -eesarol Brunty Marycarol White uw Dennis Jones

FINANCIAL SECTION

ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY

Independent Auditors’ Report

TO THE HONORABLE MEMBERS OF THE BOARD OF SUPERVISORS COUNTY OF RUSSELL, VIRGINIA LEBANON, VIRGINIA

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, the major funds, and the aggregate remaining fund information of the County of Russell, Virginia, as of and for the year ended June 30, 2011, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County of Russell, Virginia’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Russell County Public Service Authority, which represents 1.02% and 4.82% of the total net assets and program revenues, respectively, of the discretely presented component units. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the basic financial statements insofar as they relate to the amount included for the Russell County Public Service Authority in the discretely presented component unit, are based solely on the report of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the discretely presented component units, the major funds, and the aggregate remaining fund information of the County of Russell, Virginia as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note 1 of the financial statements, the County of Russell, Virginia adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective July 1, 2010.

In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2011, on our consideration of the County of Russell, Virginia’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

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ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS 1 PROFESIONAL LIMITED LIABILITY COMPANY

Independent Auditors’ Report

TO THE HONORABLE MEMBERS OF THE BOARD OF SUPERVISORS COUNTY OF RUSSELL, VIRGINIA LEBANON, VIRGINIA

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, the major funds, and the aggregate remaining fund information of the County of Russell, Virginia, as of and for the year ended June 30, 2011, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibilty of the County of Russell, Virginia’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Russell County Public Service Authority, which represents 1.02% and 4.82% of the total net assets and program revenues, respectively, of the discretely presented component units. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the basic financial statements insofar as they relate to the amount included for the Russell County Public Service Authority in the discretely presented component unit, are based solely on the report of the other auditors

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. ‘An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.

‘As described in Note 1 of the financial statements, the County of Russell, Virginia adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective July 1, 2010.

In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2011, on our consideration of the County of Russell, Virginia’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and schedules of pension and OPEB funding progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the management’s discussion and analysis and schedules of funding progress in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the management’s discussion and analysis and schedules of funding progress because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County of Russell, Virginia’s, financial statements as a whole. The introductory section, supplementary financial statements, supporting schedules, and other statistical information are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The supplementary financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the report of other auditors, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory section and other statistical information have not been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Blacksburg, Virginia November 22, 2011

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Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County of Russell, Virginia’s, financial statements as a whole. The introductory section, supplementary financial statements, supporting schedules, and other statistical information are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The supplementary financial statements and the schedule of expenditures of federal awards are the responsibilty of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the aucit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the report of other auditors, the information is fairly stated in all material respects in relation to the financial statements aS a whole, The introductory section and other statistical information have not been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Haleimoen, Sherer, leg Lhsocidter- Blacksburg, Virginia November 22, 2011

Management’s Discussion and Analysis

As management of the County of Russell, Virginia, we offer readers of the County of Russell’s financial statements this narrative overview and analysis of the financial activities of the County of Russell, Virginia for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here for placing the basic financial statements in an appropriate operational, economic and historical context

Financial Highlights

 The assets of the County of Russell, Virginia exceeded its liabilities at the close of the most

recent fiscal year by $16,963,774 (net assets). Of this amount, $4,894,099 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors.

 The government’s total net assets increased by $1,795,964. Most of the change in net assets is attributable to a reduction in long-term debt.

 As of the close of the current fiscal year, the County of Russell’s governmental funds reported combined ending fund balances of $9,298,150, a decrease of $300,188 in comparison with the prior year. Over half of this total amount, $4,770,611 is available for spending at the government’s discretion (unassigned fund balance).

 At the end of the current fiscal year, unassigned fund balance for the general fund was $4,770,611, or 15.3% of total general fund expenditures.

 The County of Russell’s total long-term debt decreased by $1,973,941 (8.3%) during the current fiscal year. The key factors in this decrease were the principal payments on outstanding issues. No new debt was issued during 2011.

Overview of the Financial Statements

This discussion and analysis are intended to serve as an introduction to the County of Russell’s basic financial statements. The County of Russell’s basic financial statements comprise three components: 1) government-side financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the County of Russell’s finances, in a manner similar to a private-sector business.

The statement of net assets presents information on all of the County of Russell’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County of Russell is improving or deteriorating.

The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but unused vacation leave).

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Management’s Discussion and Analysis

‘As management of the County of Russell, Virginia, we offer readers of the County of Russell’s financial statements this narrative overview and analysis of the financial activities of the County of Russell, Virginia for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here for placing the basic financial statements in an appropriate operational, economic and historical context

Financial Highlights

The assets of the County of Russell, Virginia exceeded its liabilities at the close of the most recent fiscal year by $16,963,774 (net assets). Of this amount, $4,894,099 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors.

The government’s total net assets increased by $1,795,964. Most of the change in net assets is attributable to a reduction in long-term debt.

As of the close of the current fiscal year, the County of Russell’s governmental funds reported combined ending fund balances of $9,298,150, a decrease of $300,188 in comparison with the prior year. Over half of this total amount, $4,770,611 is available for spending at the government’s discretion (unassigned fund balance).

At the end of the current fiscal year, unassigned fund balance for the general fund was $4,770,611, or 15.3% of total general fund expenditures.

The County of Russell’s total long-term debt decreased by $1,973,941 (8.3%) during the current fiscal year. The key factors in this decrease were the principal payments on outstanding issues. No new debt was issued during 2011

Overview of the Financial Statements

The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as. the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the County of Russell that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County of Russell include general government administration, judicial administration, public safety, public works, health and welfare, education (including the Russell County School Board), parks, recreation and cultural activities, community development and the Industrial Development Authority. The business-type activities of the County of Russell include the Russell County Public Service Authority and the Castlewood Water and Sewer Authority.

The government-wide financial statements include not only the County of Russell itself (known as the primary government), but also the legally separate Russell County School Board, Russell County Industrial Development Authority, Russell County Public Service Authority and the Castlewood Water and Sewer Authority for which the County of Russell is financially accountable. Financial information for these component units is reported separately from the financial information presented for the primary government itself.

The government-wide financial statements can be found on pages 15-16 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County of Russell, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County of Russell can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The County of Russell maintains five different governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, industrial development fund, coal road fund, workforce investment board fund and rental assistance fund, each of which are considered to be major funds.

The basic governmental fund financial statements can be found on pages 17-20 of this report.

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The government-wide financial statements can be found on pages 15-16 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County of Russell, ike other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Alll of the funds of the County of Russell can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The basic governmental fund financial statements can be found on pages 17-20 of this report.

Proprietary funds. The County of Russell maintains two different types of proprietary funds.
Enterprise funds are those used to report the same functions presented as business-type activities in the government-wide financial statements. The County of Russell uses an enterprise fund to account for its water treatment system (in Dante). Internal service funds are an accounting device used to accumulate and allocate costs internally among the County of Russell’s various functions. The County of Russell uses an internal service fund to account for its health insurance. Because both of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.

The basic proprietary fund financial statements can be found on pages 21-23 of this report.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County of Russell’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary funds financial statements can be found on page24 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 25-63 of this report.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. The County of Russell adopts an annual appropriated budget for its general fund and special revenue funds. Budgetary comparison statements have been provided for the general fund and each of the special revenue funds to demonstrate compliance with this budget. Information concerning the County of Russell’s progress in funding its obligation to provide pension benefits to its employees.
Required supplementary information can be found on pages 64-69 of this report.

Government-wide Financial Analysis

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the County of Russell, assets exceeded liabilities by $16,963,774 at the close of the most recent fiscal year.

A significant portion of the County of Russell’s net assets (56%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The County of Russell uses these assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County of Russell’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the County of Russell’s net assets (15%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted

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Proprietary funds. The County of Russell maintains two different types of proprietary funds. Enterprise funds are those used to report the same functions presented as business-type activities in the government-wide financial statements. The County of Russell uses an enterprise fund to account for its water treatment system (in Dante). Internal service funds are an accounting device used to accumulate and allocate costs internally among the County of Russell’s various functions. The County of Russell uses an internal service fund to account for its health insurance. Because both of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail

The basic proprietary fund financial statements can be found on pages 21-23 of this report.

The basic fiduciary funds financial statements can be found on page24 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 25-63 of this report.

Other information. \n addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. The County of Russell adopts an annual appropriated budget for its general fund and special revenue funds. Budgetary comparison statements have been provided for the general fund and each of the special revenue funds to demonstrate compliance with this budget. Information concerning the County of Russell’s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on pages 64-69 of this report.

Government-wide Financial Analysis

An additional portion of the County of Russell’s net assets (15%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted

net assets ($4,894,099) may be used to meet the government’s ongoing obligations to citizens and creditors.

At the end of the current fiscal year, the County of Russell is able to report positive balances in all three categories of net assets for the government as a whole. Within the governmental and business-type activities, positive balances are reported for each category except the unrestricted balance for the business-type activity which reported negative net assets of $15,174. In the prior fiscal year each separate category for both governmental and business- type activities reported positive balances.

County of Russell’s Net Assets

2011 2010 2011 2010 2011 2010

Current and other assets 21,531,172$ 21,198,350$ 54,422$ 55,906$ 21,585,594$ 21,254,256$

Capital assets 20,607,061 20,927,012 3,516,644 3,647,661 24,123,705 24,574,673

Total assets 42,138,233$ 42,125,362$ 3,571,066$ 3,703,567$ 45,709,299$ 45,828,929$

Long‐term liabilities outstanding 20,999,322$ 22,955,397$ 751,555$ 769,421$ 21,750,877$ 23,724,818$

Other liabilities 6,974,624 6,907,393 20,024 28,908 6,994,648 6,936,301

Total liabilities 27,973,946$ 29,862,790$ 771,579$ 798,329$ 28,745,525$ 30,661,119$

Net assets:

6,739,452$ 6,670,389$ 2,765,089$ 2,878,240$ 9,504,541$ 9,548,629$

Restricted 2,515,562 2,423,925 49,572 ‐ 2,565,134 2,423,925

Unrestricted 4,909,273 3,168,258 (15,174) 26,998 4,894,099 3,195,256

Total net assets 14,164,287$ 12,262,572$ 2,799,487$ 2,905,238$ 16,963,774$ 15,167,810$

Invested in capital assets, net of

related debt

Governmental activities Business‐type activities Total

There was an increase of $1,741,015 in unrestricted net assets reported in connection with the County of Russell’s governmental activities. Most of the change in net assets is attributable to a reduction in long-term debt.

Governmental activities. Governmental activities increased the County of Russell’s net assets by $1,901,715. Key elements of this increase are as follows:

 Governmental activity revenues increased from the prior year primarily due to an increase of

$637,918 (40%) in Real and Personal Public Service Corporation Taxes as a result of collection efforts on delinquent taxes.

 The County received a state Community Development Block Grant for $716,397 in FY2011 that it did not receive in FY2010.

For the most part, increases in expenses closely paralleled inflation and growth in the demand for services. Notable individual line item fluctuations between years were as follows. In the sheriff’s office where law enforcement expenditures increased from the prior year by $423,569 (29.7%) due to a growing number of arrests for drug related activity. In addition, Contributions to the Regional Jail increased by 533,406 (42.7%) due to increased jail bed days used by

-7-

net assets ($4,894,099) may be used to meet the government’s ongoing obligations to citizens and creditors.

County of Russell’s Net Assets

Governmental activities Business-type activities Total pon 20 2 210 pone 2010 Current and other assets $ 2531172 $ 2,198,350 $ 54422 $ $5,906 $21,585,594 $ 21,254,256 Capital assets msonoel mero 3515644 Set 66l 24103705 _—4STATS Total assets $ 42138233 $ 42105362 $ 3,571,056 $ 3703567 $ 45,709299 $ 4588979 longrtermliablities outstanding $ 20.999322 $ 22955387 $ TSLS85 $ 16421 $ 2L750877 § 274818 Other liabilities 6974624 6907388 ayo RHR 6904688 6,936,301 Total liabilities $ 2797394 $ 2986,790 $ 771,579 $ 798,329 $ 28745525 $ 30,661,119 Net assets: Invested in capital assets, net of related debt $ 6,739452 $ 6,670,389 $ 2,765,089 $ 2,878,240 $ 9504541 $ 9,548,629 Restricted 215562 2403905, agsn : 1565841403905 Unrestricted 4909273 3,168,258 (15,74 159% 4gn40n9 3,195,256 Total net assets $ 14164287 $ 12260572 $ 2.799487 $ 2,905,238 $ 16963774 $ 15,167,810

Governmental activities. Governmental activities increased the County of Russell’s net assets by $1,901,715. Key elements of this increase are as follows:

Governmental activity revenues increased from the prior year primarily due to an increase of $637,918 (40%) in Real and Personal Public Service Corporation Taxes as a result of collection efforts on delinquent taxes.

The County received a state Community Development Block Grant for $716,397 in FY2011 that it did not receive in FY2010.

Russell County prisoners. Contributions for the Russell County Industrial Development Authority increased by $1,069,050 (246.5%) due largely to principal payments on outstanding debt. School capital projects were completed in 2010 and no similar projects were undertaken in 2011 reducing capital expenditures between years by $878,566 (36.3%).

County of Russell Changes in Net Assets

2011 2010 2011 2010 2011 2010

Revenues:

Program revenues:

Charges for services 264,991$ 328,202$ 72,073$ 65,160$ 337,064$ 393,362$

Operating grants and

contributions 10,635,876 7,473,127 ‐ ‐ 10,635,876 7,473,127

General revenues:

Property taxes 13,683,476 13,004,381 ‐ ‐ 13,683,476 13,004,381

Other taxes 6,340,919 6,123,807 ‐ ‐ 6,340,919 6,123,807

2,638,202 2,465,451 ‐ ‐ 2,638,202 2,465,451

Other 267,254 280,016 234 154 267,488 280,170

Total revenues 33,830,718 29,674,984 72,307 65,314 33,903,025 29,740,298

‐ ‐

Expenses: ‐ ‐

General government 1,691,031 1,828,631 ‐ ‐ 1,691,031 1,828,631

Judicial administration 2,112,758 2,219,866 ‐ ‐ 2,112,758 2,219,866

Public safety 5,091,612 4,234,145 ‐ ‐ 5,091,612 4,234,145

Public works 4,003,987 5,549,934 ‐ ‐ 4,003,987 5,549,934

Health and welfare 8,592,042 6,070,091 ‐ ‐ 8,592,042 6,070,091

Education 5,681,243 5,897,486 ‐ ‐ 5,681,243 5,897,486

Parks, recreation and cultural 563,123 560,735 ‐ ‐ 563,123 560,735

Community development 3,191,256 1,491,257 ‐ ‐ 3,191,256 1,491,257

Interest on long‐term debt 756,064 728,202 ‐ ‐ 756,064 728,202

Service Authority ‐ ‐ 423,945 434,552 423,945 434,552

Total expenses 31,683,116 28,580,347 423,945 434,552 32,107,061 29,014,899

Change in net assets before transfers 2,147,602 1,094,637 (351,638) (369,238) 1,795,964 725,399

Transfers (245,887) (254,728) 245,887 254,728 ‐ ‐

Change in net assets 1,901,715 839,909 (105,751) (114,510) 1,795,964 725,399

Net assets ‐ July 1, 12,262,572 11,422,663 2,905,238 3,019,748 15,167,810 14,442,411

Net assets ‐ June 30, 14,164,287$ 12,262,572$ 2,799,487$ 2,905,238$ 16,963,774$ 15,167,810$

Governmental activities Business‐type activities Total

Grants and contributions not

restricted to specific programs

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County of Russell Changes in Net Assets

Governmental activities Business type activites Tota puts 2010 2 2010 au 2010 Revenues: Program revenues: Charges for services $ 264,991 $ 328,202 $ 2073 § 65,160 $ 337,064 $ 393,362 Operating grants and contributions 10635876 7,473,107 : : e357 7,473,107 General revenues: Property taxes 13,683,476 13,004,381 : : 13,688,476 13,004,381 Other taxes 6,340,919 6,123,807 - - 6,340,919 6,123,807 Grants and contributions not restricted to specific programs 2638202 2,485,451 - - 2688202 2,465,451 Other 267,254 280,016 Ba 1s4 267,488 230,170 Total revenues 33,830,718 29,674,984 72307 65,314 33,903,025 29,740,298 Expenses - : General government 1,691,031 1,828,631 - 1,691,031 1,828,631 Jucial administration 212758 2219,866 : : 2112758 2.719866 Publicsafety Some. 4734.45 : : sosier2 4.234.145 Public works 4,003,987 5,549,934 - - 4,003,987 5,549,934 Health and welfare 859208 6070091 : : 8592082 6,070,081 Education 568,203 5,897,486 : : 5,681,288 5,897,486 Pars, recreation and cultural 563,123 360,735 : : 563,123 560,735 Community development 319,256 149,257 : : 391,256 149,257 Interest on long-term debt 756,064 728,202 - 756,064 728,202 Service Authority : : 73.945 434,552 473.45 434,52 Total expenses 31683116 28580347 473.945 434552 32107061 29,014,899 Change innetassetsbeforetransfers 2,147,602 __ 1.054637 (351,638) (369,238) 1,795,964 725399 Transfers (245e87) ___ (254,728) 245 887 254,78 Change innet assets 1,901,715 839,909 (105,751) (114510) 1,795,964 725399 Net assets - July 1, 12,262,572 11,422,663 2,905,238 3,019,748 15,167,810 14,442,411, Net assets June 30, $14,164,287 $ 12,260572 $ —2,799.487 $ 2905238 $ 16,963,774 $15,167,810

Business-type activities. Business-type activities decreased the County of Russell’s net assets by $105,751. The Dante Water Treatment System referred to as “the Service Authority,” incurred expenses of $423,945 and collected program revenue of $72,073. The Service Authority also received a General Fund subsidy of $245,887. By policy, the Dante Service Authority is not an enterprise activity and therefore is not expected to be self-supporting.

31%

40%

19%

Revenues by Source ‐ Governmental Activities

Charges for services

Operating grants and contributions

Property taxes

Other taxes

Grants and contributions not restricted to specific programs

Other

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Revenues by Source - Governmental Activities 1% 1%

Charges for services

'™ Operating grants and contributions

m Property taxes

m Other taxes

'§ Grants and contributions not restricted to specific

programs

Other

$‐

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Expenses Program Revenue

Service Authority (Dante Water Treatment System)

100%

Revenues by Source ‐ Business‐Type Activities

Charges for services

Other

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$450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000

$50,000

Service Authority

(Dante Water Treatment System)

Expenses

Program Revenue

Revenues by Source - Business-Type Activities

™ Charges for services

Other

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Financial Analysis of the Government’s Funds

As noted earlier, the County of Russell uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the County of Russell’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the county of Russell’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the County of Russell’s governmental funds reported combined ending fund balances of $9,298,150, a decrease of $300,188 in comparison with the prior year. Just over half of this amount ($4,770,611) represents unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is restricted or committed to indicate that it is not available for new spending because it has already been restricted for the Coal Road/Revenue Sharing projects or debt service and bond covenants.

The general fund is the chief operating fund of the County of Russell. At the end of the current fiscal year, unassigned fund balance was $4,770,611, while total fund balance was $4,910,249.
As a measure of the general fund’s liquidity, it may be useful to compare both unassigned and total fund balance to total fund expenditures. Unassigned fund balance represents 15% of general fund expenditures, while total fund balance represents 16% of that same amount.

The fund balance of the County of Russell’s General Fund decreased by $1,327,913 during the current fiscal year. Key factors in the decrease are as follows:

 General Fund expenditures exceeded general fund revenues by $1,061,821. The major contributors were increased expenditures in Public Safety, Health and Welfare and Community Development. Only the Community Development expenditures were significantly offset by corresponding grants or other offsetting revenue sources.

 The General Fund transferred $245,887 to the Service Authority to subsidize operations of the Dante Water Treatment System.

The Industrial Development Fund is the fund within the County’s accounting structure used primarily to pay the debt service incurred by the Russell County Industrial Development Authority on behalf of the County of Russell.

The Coal Road Fund provides the 50% match required for the Virginia Department of Transportation’s (VDOT) Revenue Sharing Program. Part of the coal and gas severance taxes collected are deposited into this fund and used to fund the approved projects. Several projects are approved and were in the planning stages at June 30, 2011. Construction on these projects, along with the related expenditures, will occur during fiscal year 2012. As a result, the fund balance in the Coal Road Fund increased by approximately one million dollars during the fiscal year. The entire balance of $2,515,562 at the end of the year is committed for various projects.

The Workforce Investment Board Fund is a state and federal funded program. No County funds are used to support this program. The fund balance increased $23,058 during the year ended June 30, 2011. The entire fund balance of $23,058 is committed for future program support.

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Financial Analysis of the Government’s Funds

As noted earlier, the County of Russell uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

As of the end of the current fiscal year, the County of Russell’s governmental funds reported combined ending fund balances of $9,298,150, a decrease of $300,188 in comparison with the prior year. Just over half of this amount ($4,770,611) represents unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is restricted or committed to indicate that it is not available for new spending because it has. already been restricted for the Coal Road/Revenue Sharing projects or debt service and bond covenants.

The general fund is the chief operating fund of the County of Russell. At the end of the current fiscal year, unassigned fund balance was $4,770,611, while total fund balance was $4,910,249. ‘As a measure of the general fund’s liquidity, it may be useful to compare both unassigned and total fund balance to total fund expenditures. Unassigned fund balance represents 15% of general fund expenditures, while total fund balance represents 16% of that same amount.

The fund balance of the County of Russell’s General Fund decreased by $1,327,913 during the current fiscal year. Key factors in the decrease are as follows:

General Fund expenditures exceeded general fund revenues by $1,061,821. The major contributors were increased expenditures in Public Safety, Health and Welfare and Community Development. Only the Community Development expenditures were significantly offset by corresponding grants or other offsetting revenue sources.

The General Fund transferred $245,887 to the Service Authority to subsidize operations of the Dante Water Treatment System.

The Coal Road Fund provides the 50% match required for the Virginia Department of Transportation’ (VDOT) Revenue Sharing Program. Part of the coal and gas severance taxes collected are deposited into this fund and used to fund the approved projects. Several projects are approved and were in the planning stages at June 30, 2011. Construction on these projects, along with the related expenditures, will occur during fiscal year 2012. As a result, the fund balance in the Coal Road Fund increased by approximately one million dollars during the fiscal year. The entire balance of $2,515,562 at the end of the year is committed for various projects.

The Workforce Investment Board Fund is a state and federal funded program. No County funds

are used to support this program. The fund balance increased $23,058 during the year ended June 30, 2011. The entire fund balance of $23,058 is committed for future program support.

Proprietary funds. The County of Russell’s proprietary funds provide the same type information found in the government-wide financial statements, but in more detail.

Unrestricted net assets of the Service Authority at the end of the year amounted to ($15,174), and those for the Health Insurance Fund amounted to $3,025,055. The total (decline)/growth in the net assets for both funds was ($105,751) and $461,146, respectively. Other factors concerning the finances of these two funds have already been addressed in the discussion of the County of Russell’s business-type activities.

General Fund Budgetary Highlights

For many years, management in Russell County simply adjusted the final budget at June 30 to equal the actual expenditures. In fiscal year 2011, this practice was stopped. Beginning with fiscal year 2012 proper procedures will be followed in which the original budget will be adjusted to reflect supplemental appropriations adopted by the Board of Supervisors throughout the year or during a public hearing to formally amend the budget. This will provide a truer picture of the Final Budget for annual financial report presentation.

Capital Asset and Debt Administration

Capital assets

The County of Russell’s investment in capital assets for its governmental and business-type activities as of June 30, 2011, amounts to $24,123,705 (net of accumulated depreciation). This investment in capital assets includes land, buildings, a utility plant, machinery and equipment and construction in progress. The total investment in the County of Russell’s investment in capital assets for the current fiscal year decreased by 1.8% (a 1.5% decrease for governmental activities and a 3.59% decrease for business-type activities). The decrease in investment is due to accumulated depreciation. Due to the continued depressed economy, the County did not expend significant funds on capital assets in fiscal year 2011.

Governmental activities Business-type activities Total

2011 2010 2011 2010 2011 2010

Land $ 1,541,333 $1,541,333 $ - $ - $ 1,541,333 $1,541,333

Construction in Progress 1,494,450 2,445,645 - - $ 1,494,450 $ 2,445,645

Buildings 16,390,487 15,412,448 - - $16,390,487 $15,412,448

Utility plant - - 3,516,644 3,647,661 $ 3,516,644 $ 3,647,661

Machinery and equipment 1,180,791 1,527,586 - - $ 1,180,791 $ 1,527,586

Total $ 20,607,061 $20,927,012 $3,516,644 $3,647,661 $24,123,705 $24,574,673

Additional information on the County of Russell’s capital assets can be found in note 10 on pages 52-54 of this report.

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Proprietary funds. The County of Russell’s proprietary funds provide the same type information found in the government-wide financial statements, but in more detail

General Fund Budgetary Highlights

Capital Asset and Debt Administration Capital assets

The County of Russell’s investment in capital assets for its governmental and business-type activities as of June 30, 2011, amounts to $24,123,705 (net of accumulated depreciation). This investment in capital assets includes land, buildings, a utility plant, machinery and equipment and construction in progress. The total investment in the County of Russell’s investment in capital assets for the current fiscal year decreased by 1.8% (a 1.5% decrease for governmental activities and a 3.59% decrease for business-type activities). The decrease in investment is due to accumulated depreciation. Due to the continued depressed economy, the County did not ‘expend significant funds on capital assets in fiscal year 2011

Governmental activities | Business-lype activities Total 2011 2010 2011 2010 2011 2010 Land $1,541,333 [$1,547,333 | $ - |S - [$1,547,333 | $1,547,333 Construction in Progress 1,494,450 | 2,445,645 = [$1,494,450 | $2,445,645 Buildings 16,390,487 | 15,412,448 = ~ [$16,390,487 | $15,412,448 Ua plant = = [3516644 [3,647,661 [$3,516,644 | $ 3,647,601 Machinery and equipment 1,180,791 | 1,527,586 = = | $1,180,791 | $ 1,527,586 Total '$_20,607.061 | $20.927.012 | $3.516.644 | $3.647.661 | $24,123,705 | $24,574,673

Additional information on the County of Russell’s capital assets can be found in note 10 on pages 52-54 of this report.

Long-term debt

At the end of the current fiscal year, the County of Russell had total debt outstanding of $21,750,877. Of this total, $15,480,143 comprises general obligation and revenue bonds all backed by the full faith and credit of the County and $3,983,501 comprise Literary Fund Loans and Literary Anticipation Note on the financial statements of the component unit School Board.
The remainder of the County of Russell’s debt represents lease purchase agreements, landfill post-closure liabilities, OPEB obligations and compensated absences.

The County of Russell’s total debt decreased by $1,973,941 (8.3%) during the current fiscal year. The key factors in the decrease were the principal payments on various issues.

To date, Russell County has not sought a credit rating from any of the three ratings agencies.
The County’s debt has been issued as bank qualified debt through local banks or through pooled options such as the Virginia Public School Authority, the Virginia Resources Authority and Rural Development.

Additional information on the County of Russell’s long-term debt can be found in note 7 on pages 41-45 of this report.

Economic Factors and Next Year’s Budgets and Rates

The County’s staff and Board of Supervisors considered many factors when developing the fiscal year 2012 budget. The fiscal year 2012 approved budget for the General Fund is $25,902,191, an 11% increase from the fiscal year 2011 budget. Local revenue, which includes property taxes, was expected to increase from fiscal year 2011 by 4.6%. Machinery and tool taxes are expected to decline in fiscal year 2012 as a direct result of the closing of two major industries in the County. State and federal revenues comprise about 19.2% of the total general fund. State and federal revenues are expected to be up by $1,681,422 or 51%, due to the award of new grants. The final approved budget maintained the real property tax rate of $0.61 per $100 of assessed value for calendar tax year 2011.

2011 2010 2011 2010 2011 2010

General obligation bonds 10,083,228$ 10,905,464$ ‐$ ‐$ 10,083,228$ 10,905,464$

Literary loans 2,990,863 3,417,144 ‐ ‐ 2,990,863 3,417,144

Revenue bonds 4,645,360 4,847,048 751,555 769,421 5,396,915 5,616,469

Literary anticipation note 992,638 992,638 ‐ ‐ 992,638 992,638

Deferred amounts:

Bond premium 300,119 316,923 ‐ ‐ 300,119 316,923

Lease purchase agreements 357,060 701,310 ‐ ‐ 357,060 701,310

Landfill closure/postclosure liability 1,100,775 1,264,062 ‐ ‐ 1,100,775 1,264,062

OPEB obligation 7,153 4,949 ‐ ‐ 7,153 4,949

Compensated absences 522,126 505,859 ‐ ‐ 522,126 505,859

Total 20,999,322$ 22,955,397$ 751,555$ 769,421$ 21,750,877$ 23,724,818$

Governmental activities Business‐type activities Total

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Long-term debt

At the end of the current fiscal year, the County of Russell had total debt outstanding of $21,750,877. OF this total, $15,480,143 comprises general obligation and revenue bonds all backed by the full faith and credit of the County and $3,983,501 comprise Literary Fund Loans and Literary Anticipation Note on the financial statements of the component unit School Board. The remainder of the County of Russell’s debt represents lease purchase agreements, landfill post-closure liabilities, OPEB obligations and compensated absences.

Governmental activities Business-type activities Total zou 2010 part 2010 2a 2010

General obligation bonds $ 10083,228 $ 10,905,464 $ $8 ~ $ 10083,228 §

Literary loans 2,990,863, 3,417,144 2,990,863,

Revenue bonds 4,645,360 4,847,088 751,555 769,421 5,396,915

Literary anticipation note 992,638 992,638 992,638

Deferred amounts:

Bond premium 300,119 316,923 300,119 316.923 Lease purchase agreements 357,060 701,310 - 357,060 701,310 Landfill cosure/postelosure liability 4,100,775 1,264,062 4,100,775 1,264,062 OPEB obligation 7483 4.993 : 7,153 4,949 Compensated absences 522,126 505,859 522,126 505,859

Total S$ 20999.322 $22,955,397 § 751555 $ 765.021 § 21,750,877 § 23724818

The County of Russell’s total debt decreased by $1,973,941 (8.3%) during the current fiscal year. The key factors in the decrease were the principal payments on various issues.

To date, Russell County has not sought a credit rating from any of the three ratings agencies. The County’s debt has been issued as bank qualified debt through local banks or through pooled options such as the Virginia Public School Authority, the Virginia Resources Authority and Rural Development.

Additional information on the County of Russell’s long-term debt can be found in note 7 on pages 41-45 of this report.

Economic Factors and Next Year’s Budgets and Rates

The County’s staff and Board of Supervisors considered many factors when developing the fiscal year 2012 budget. The fiscal year 2012 approved budget for the General Fund is $25,902,191, an 11% increase from the fiscal year 2011 budget. Local revenue, which includes property taxes, was expected to increase from fiscal year 2011 by 4.6%. Machinery and tool taxes are expected to deciine in fiscal year 2012 as a direct result of the closing of two major industries in the County. State and federal revenues comprise about 19.2% of the total general fund. State and federal revenues are expected to be up by $1,681,422 or 51%, due to the award of new grants. The final approved budget maintained the real property tax rate of $0.61 per $100 of assessed value for calendar tax year 2011.

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Requests for Information

This financial report is designed to provide a general overview of the County of Russell’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Marycarol White, County Administrator, County of Russell, P.O. Box 1208, 137 Highland Drive, Lebanon, VA 24266.

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Requests for Information

“Ade

Basic Financial Statements

Exhibit 1

Industrial Russell County Castlewood Governmental Business-type Development Public Service Water and Sewage

Activities Activities Total School Board Authority Authority Authority

ASSETS Cash and cash equivalents 9,539,038$ 3$ 9,539,041$ 2,244,246$ 425,234$ 560,793$ 66,647$
Receivables (net of allowance for uncollectibles):

Taxes receivable 7,131,376 - 7,131,376 - - - -
Accounts receivable 522,068 4,847 526,915 34,707 5,372 192,929 203,832
Notes receivable 4,344 - 4,344 - - - -

Due from primary government - - - - 425,000 - 43,570
Due from component unit 200,000 - 200,000 - - - -
Due from other governmental units 1,642,484 - 1,642,484 2,103,255 - - -
Inventories - - - - - 31,811 -
Lease purchase receivable - - - - 610,165 - -
Prepaid expenses - - - 115,673 - - 27,756
Other assets:

Bond issuance costs - - - - 25,412 - -
Restricted assets:

Temporarily restricted: Cash and cash equivalents 2,352,224 49,572 2,401,796 - 79 619,680 118,544
Investments 139,638 - 139,638 - - - -

Noncurrent assets: Lease purchase receivable - net of current portion - - - - 371,207 - -

Capital assets (net of accumulated depreciation): Land 1,541,333 - 1,541,333 4,643,707 1,439,397 106,332 107,608
Buildings and improvements 16,390,487 - 16,390,487 10,876,590 7,300,304 2,429,465 -
Machinery and equipment 1,180,791 - 1,180,791 1,741,021 464,284 - -
Utility plant in service - 3,516,644 3,516,644 - - 12,871,066 8,027,195
Construction in progress 1,494,450 - 1,494,450 90,571 - 2,356,894 1,332,118
Less: Accumulated Depreciation - - - - - (3,401,156) -

Total assets 42,138,233$ 3,571,066$ 45,709,299$ 21,849,770$ 11,066,454$ 15,767,814$ 9,927,270$

LIABILITIES Accounts payable 1,789,684$ 18,206$ 1,807,890$ 413,190$ 15,855$ 431,883$ 121,911$
Accrued liabilities 8,331 - 8,331 997,101 - 175,016 13,734
Customer deposits - - - - - 13,141 43,638
Accrued interest payable 353,065 1,818 354,883 - 42,506 21,810 7,532
Due to primary government - - - - 200,000 - -
Due to component unit 425,000 - 425,000 - - - -
Unearned revenue 4,398,544 - 4,398,544 - - - -
Long-term liabilities:

Due within one year 1,899,645 18,602 1,918,247 721,881 2,196,717 131,724 240,343
Due in more than one year 19,099,677 732,953 19,832,630 307,004 8,277,163 7,567,338 3,786,252

Total liabilities 27,973,946$ 771,579$ 28,745,525$ 2,439,176$ 10,732,241$ 8,340,912$ 4,213,410$

NET ASSETS Invested in capital assets, net of related debt 6,739,452$ 2,765,089$ 9,504,541$ 17,351,889$ 3,169,362$ 6,663,539$ 5,452,242$
Restricted for:

Coal Road 2,515,562 - 2,515,562 - - - -
Debt service and bond covenants - 49,572 49,572 - 79 619,680 118,544

Unrestricted (deficit) 4,909,273 (15,174) 4,894,099 2,058,705 (2,835,228) 143,683 143,074
Total net assets 14,164,287$ 2,799,487$ 16,963,774$ 19,410,594$ 334,213$ 7,426,902$ 5,713,860$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Net Assets

June 30, 2011

Primary Government Component Units

-15-

County of Russe Virgina ‘Stata of Not Assets une 38,2011 Component Unis Primary Goverment Tndoairal uss County Casfawood ‘Governmental Business ype Development Pubile Service Watorané Sewage ‘ets ‘Actes Taal SchoolBend Auto ‘Authxty ‘uthrty ASSETS ‘ash an cath earns S$ sso § 3S esione $2 asa § ROHS sos Fecoabies nto aware for unotebies “aves enable rai376 : rai376 : : . . Dern eenate ‘sr2088 a7 ‘6915 unr sam 2509 nose Notes reat a . 43 . : : . ue fo rary goverment : : : : 25900 : as ve fom earponentunt 220000 2n090 ee fom one goverment us 1488 1488 2.103285 erties sat ase purchase rctnable 610368 ropa expenses ‘ser 188 ber assets Bon marca as pare Resets ass Teper resi ‘Casha cash equals assez aes 2401786 cy 619600 as resins 19658 19608 : : : . Nene ass ease pues recat att caret porn . . . . amar . . opt asses rt aco eet ‘a sea . seas so03707 1 as93e7 5302 oT e08 Bukdngs andimprovenenis 16390467 : 16391467 10875590 To00304 2409465, : Mactnr are eaupneré 1.490781 : 1.490781 aia “a2 : : ny pant server astee i664 12571065 arses Coreetonnparess + assas0 149450 wor 2.358694 same ass: cored Daproctaon (9408158 Tol assets {ama $s $a STS se serie Fe vuasumies econ pyle $ vTap § cr ee er Dee abies e381 ea) oar 175016 137 Cesomer pst 318 3608 ered res pyle 53085 sa ss4908 42506 na 7522 Due rina goverment . : . : 20900 : . ‘Dee conponen nt 25900 : 25900 : : : : ‘Usama eer 598 54 : 598 54 : : : : Lengtem bites: ‘vein oe yar + 96s eon 919207 ma 29677 wim 200348 Deen meetnanone ae 19025677 12958 19532690 07908 e736 1567338 705252 “Tol ibies 7 ass § rise ——aaisses $F$ format § ——esu9ie $470.40, eT ASSETS lvestedin cap ass, tof rate et $ — Bruedse $ © 270508 $§ © SsRSHT $ © TTSLERD $—ayeRaR2 $ © om S$ SusDaKe Rested oe Cos Rod 2582 2582 Deb src nbd comrants aes 8572 8 19600 8584 Unrest eit 4908273, gs.) 4534098 2058 705 (25.228 13.680 ‘sara “eal eases $i eisr§ a_i $e sigs $79 $F sino

‘Tha acorpanying nts ote fan estan anita a of his tate

Exhibit 2

Operating Capital Industrial Russell County Castlewood Charges for Grants and Grants and Governmental Business-type Development Public Service Water and Sewerage

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total School Board Authority Authority Authority

PRIMARY GOVERNMENT: Governmental activities:

General government administration 1,691,031$ 13,545$ 299,641$ -$ (1,377,845)$ -$ (1,377,845)$
Judicial administration 2,112,758 7,642 544,042 - (1,561,074) - (1,561,074)
Public safety 5,091,612 67,265 1,566,780 - (3,457,567) - (3,457,567)
Public works 4,003,987 141,555 12,398 - (3,850,034) - (3,850,034)
Health and welfare 8,592,042 27,590 7,316,341 - (1,248,111) - (1,248,111)
Education 5,681,243 - - - (5,681,243) - (5,681,243)
Parks, recreation, and cultural 563,123 7,394 79,431 - (476,298) - (476,298)
Community development 3,191,256 - 817,243 - (2,374,013) - (2,374,013)
Interest on long-term debt 756,064 - - - (756,064) - (756,064)

Total governmental activities 31,683,116$ 264,991$ 10,635,876$ -$ (20,782,249)$ -$ (20,782,249)$

Business-type activities: Service Authority 423,945$ 72,073$ -$ -$ -$ (351,872)$ (351,872)$

Total primary government 32,107,061$ 337,064$ 10,635,876$ -$ (20,782,249)$ (351,872)$ (21,134,121)$

COMPONENT UNITS: School Board 40,800,602$ 861,042$ 34,443,631$ -$ (5,495,929)$ -$ -$ -$
Industrial Development Authority 1,028,474 - 1,485,727 - - 457,253 - -
Russell County Public Service Authority 1,808,391 1,024,401 156,096 796,739 - - 168,845 -
Castlewood Water and Sewer 1,570,082 1,089,599 - 1,147,331 - - - 666,848
Total component units 45,207,549$ 2,975,042$ 36,085,454$ 1,944,070$ (5,495,929)$ 457,253$ 168,845$ 666,848$

General revenues: General property taxes 13,683,476$ -$ 13,683,476$ -$ -$ -$ -$
Other local taxes: Local sales and use taxes 1,832,391 - 1,832,391 - - - -
Coal road and severence taxes 3,575,042 - 3,575,042 - - - -
Consumers’ utility taxes 587,625 - 587,625 - - - -
Grantee taxes 101,414 - 101,414 - - - -
Other local taxes 244,447 - 244,447 - - - -
Unrestricted revenues from use of money and property 89,585 234 89,819 1,500 1,003,287 17,915 1,314
Miscellaneous 177,669 - 177,669 239,214 - 12,110 221,932
Payments from the County of Russell, Virginia - - - 5,877,504 - - -
Grants and contributions not restricted to specific programs 2,638,202 - 2,638,202 - - - -
Transfers (245,887) 245,887 - - - - -
Total general revenues and transfers 22,683,964$ 246,121$ 22,930,085$ 6,118,218$ 1,003,287$ 30,025$ 223,246$
Change in net assets 1,901,715$ (105,751)$ 1,795,964$ 622,289$ 1,460,540$ 198,870$ 890,094$
Net assets - beginning 12,262,572 2,905,238 15,167,810 18,788,305 (1,126,327) 7,228,032 4,823,766
Net assets - ending 14,164,287$ 2,799,487$ 16,963,774$ 19,410,594$ 334,213$ 7,426,902$ 5,713,860$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Activities

For the Year Ended June 30, 2011

Net (Expense) Revenue and

Component UnitsGovernment

Program Revenues Changes in Net Assets Primary

-16-

County of Russo Virginia Statomant of Actos Forte Yeo Ended June 39,2011

Net (Expense Revenue ane Program Revenues ‘Changes in Net Ass Panay ‘Copano Goverment Unit Operating Catal Traced — Russell County Caslewsod charges for Grants and_—<Gants nd——Govermental_usinesesype Devsopment Pube Service ater ané Sewerage FunatinsPrograms ‘penses —Servisss—Conbuons Contos Ales Actives Tlal-«‘SchoolBond Anorly Authority ‘usec ‘PRMARY GOVERNMENT: ‘overeral aes: ‘Gene gorermert adiistaton S tosugat S13sH $ set S -§ (arres s = 8 carrass a stmnstaten 22758 762 sue (setore > qsetors| Patsy Soater2 e128 1588700 + Gasser > Gasser Pobewers 6585 12398 5 sa934) > Ga00%)| Het abwtre ms 7316341 5 (288s) > zen) sieaten : . Seta) > Geet2s3 Pans, receaton anda 1394 79435 : ($7828) ~sr6238 ‘Comurty deepen . ara = earn) + amor Ines on ong rm cet 78 : : (15,0654) 2136088) “ol greet aces 5S = Tamas = Sma Busnes pe aches: ‘Seni Autry says seas os 3 $ ester $ stra) “oa pay goverment S_aRoiget_$—saroe$— sae = SES sia sa ‘COMPONENT UNTS: ‘Sere oa S mans s sIoR s MaET S - Inds DveomentAshoty ‘02874 5727 : ussel County ube Seve Authorly eosa——tgaaaor 15006 8738 (Cestenced Water and Ser ‘isrone2 0500 14731 “oalearponert unis Bar HS 3297502 § BOER SSO ene eves: ‘Gener pope aes S rsgssaTe - $ tsa8sa6 § s os 8 elie Loca ees nd sees sas2301 = tai2301 - (Coal ot ane sever ines ssrs0%2 5 ast 002 : Consume uty es 828 srs : Cram aes ‘orate 5 soua : Otero aes nua Smut : resi evens tom us of ney a opty 5 mw mate 1500 1008287 vr918 13 Mszaersoss sma89 age ante - nano anise Payments om te County Russel, Vig : : * sarrsoe : . ° ‘ean ané cans ot esc spete peyans 2ess.ai2 S ngss202 : : Tastes ausger) _ 24587 - : : : : “oa err revenues ana antes FDassss6i S216 01 _§ Does eTANS F_iomRDaT_F so ais Charge inet asses $190,715 8 —(O57siy § 17esa6t S$ ezz280 $—iaahsao-§ Tans “090 Netases-beganeg apeosr2 2005235 ser aio taransos isso) zane 4.323.786 Netases-ndng Fiza 8 —2Tonsa? S ieoss7T4 S_tgaiosoe 421s F —Lasa SBF TSO

‘The aezorpanying ols ote farses ean inte at oth teen

-16-

Exhibit 3

Industrial Coal Workforce Rental General Development Road Investment Board Assistance Total

ASSETS Cash and cash equivalents 5,463,112$ 589,281$ -$ 125,437$ -$ 6,177,830$
Receivables (net of allowance for uncollectibles)

Taxes receivable 7,131,376 - - - - 7,131,376
Accounts receivable 303,358 - 215,241 - - 518,599
Notes receivable 4,344 - - - - 4,344

Due from other funds 114,126 1,260,000 - - - 1,374,126
Due from component unit 200,000 - - - - 200,000
Due from other governmental units 1,380,958 - - 261,526 - 1,642,484
Restricted assets:

Temporarily restricted: Cash and cash equivalents - - 2,352,224 - - 2,352,224
Investments 139,638 - - - - 139,638
Total assets 14,736,912$ 1,849,281$ 2,567,465$ 386,963$ -$ 19,540,621$

LIABILITIES AND FUND BALANCES Liabilities:

Accounts payable 1,148,380$ -$ 48,997$ 252,685$ -$ 1,450,062$
Accrued liabilities 8,331 - - - - 8,331
Due to other funds 1,260,000 - 2,906 111,220 - 1,374,126
Due to component unit 425,000 - - - - 425,000
Deferred revenue 6,984,952 - - - - 6,984,952

Total liabilities 9,826,663$ -$ 51,903$ 363,905$ -$ 10,242,471$

Fund balances: Restricted:

Coal Road -$ -$ 2,515,562$ -$ -$ 2,515,562$
School Construction 139,638 - - - - 139,638

Committed: Special revenue funds - 1,849,281 - 23,058 - 1,872,339

Unassigned: 4,770,611 - - - - 4,770,611
Total fund balances 4,910,249$ 1,849,281$ 2,515,562$ 23,058$ -$ 9,298,150$
Total liabilities and fund balances 14,736,912$ 1,849,281$ 2,567,465$ 386,963$ -$ 19,540,621$

The accompanying notes to the financial statements are an integral part of this statement

County of Russell, Virginia Balance Sheet

Governmental Funds June 30, 2011

-17-

Exhibit ‘County of Russel, Virginia Balance Sheet Governmental Funds une 30,2014

Indust oat Development oad Total ASSETS Cash ad cash eure: S 546312 $ saa S - 8 15437 § <8 617890 Receivetes net of lowance for unolecbls) Taxes receivable 1131378 . 731876 Acoauns receivable 308.358 igz4i : 518809 Notes eciable pen : 4344 ‘ue fom ae funds 4143128 1.280.000 : 1.874126 Due fom conponet uit 200.000 : : : : "0,000 Due fom cher goverment unis 1.380958 281526 1612488 Resticed assets Temporary rsticted ‘Cash and cash equvene : 2352204 : 2352224 Irvestents 129698 : “aae38 Total asses $795 912 STP _S isan 24 LUABILITIES AND FUND BALANCES. abies Aconuns payable 8 1Ma380 $ S$ aa9n7 S_2s28a5 S 8 18no62 eoued abies 8331 : : e331 Due otter finds 1,260,000, 2906 11220 1.374128 ‘ue to component uit "25.000 . ‘25.000 Deferred revenve 984 952 : : : : 5.984.952 Total abies 99055835 oss 5S E_ozan ari Fund bance Restle ‘eal Road s 8 S$ 2815882 § “8 S$ 2816862 Sctoo|Constvctin 139638 : : : : “39638 Commits ‘Special revenue finds : 1.849281 730858 572330 Unassigned: arrest - - armostt Total und tances Sis 3 Tas Pa SE 978150 “otal abilities ana turd balances S14 795912 § 1840.51 § 2857488 _§ 305.863 7950821

‘The accompanying notes tthe nancial statements ae an integral pao hs staan

“AT.

Exhibit 4

Amounts reported for governmental activities in the statement of net assets are different because:

Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds 9,298,150$

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 20,607,061

Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 2,586,408

Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. 3,025,055

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. (21,352,387)

Net assets of governmental activities 14,164,287$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Reconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net Assets June 30, 2011

-18-

Exhibit 4 County of Russell, Virginia Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Assets June 30, 2011,

Amounts reported for governmental activites in the statement of net assets are different because: ‘Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds $ 9,298,150

Capital assets used in governmental activities are not financial resources and, therefore, ‘are not reported in the funds, 20,607,061

Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred i the funds. 2,886 408

Intemal service funds are used by management to charge the costs of certain activities, ‘such as insurance and telecommunications, to individual funds. The assets and labile of the internal service funds are included in governmental activites inthe

statement of net assets 3,025,055 Long-term liabilities, including bonds payable, are not due and payable in the current

period and, therefore, are not reported in the funds, (24,352,387) Net assets of governmental activities 14164287

‘The accompanying notes tothe financial statements are an integral part of this statement

-18-

Exhibit 5

Industrial Coal Workforce Rental General Development Road Investment Board Assistance Total

REVENUES General property taxes 13,548,896$ -$ -$ -$ -$ 13,548,896$
Other local taxes 4,553,398 - 1,787,521 - - 6,340,919
Permits, privilege fees, and regulatory licenses 22,834 - - - - 22,834
Fines and forfeitures 1,206 - - - - 1,206
Revenue from the use of money and property 58,402 3,239 10,373 - - 72,014
Charges for services 240,951 - - - - 240,951
Miscellaneous 177,669 - - - - 177,669
Recovered costs 294,919 - - - - 294,919
Intergovernmental revenues:

Commonwealth 8,677,512 - - 67,834 - 8,745,346
Federal 2,454,979 - - 2,073,753 - 4,528,732

Total revenues 30,030,766$ 3,239$ 1,797,894$ 2,141,587$ -$ 33,973,486$

EXPENDITURES Current:

General government administration 1,712,850$ -$ -$ -$ -$ 1,712,850$
Judicial administration 2,106,641 - - - - 2,106,641
Public safety 5,226,797 - - - - 5,226,797
Public works 3,305,813 - 796,466 - - 4,102,279
Health and welfare 6,523,318 - - 2,118,529 20,205 8,662,052
Education 5,167,968 - - - - 5,167,968
Parks, recreation, and cultural 556,723 - - - - 556,723
Community development 2,311,048 - - - - 2,311,048
Nondepartmental 103,820 - - - - 103,820

Capital projects 1,540,233 - - - - 1,540,233
Debt service: -

Principal retirement 1,794,455 - - - - 1,794,455
Interest and other fiscal charges 742,921 - - - - 742,921

Total expenditures 31,092,587$ -$ 796,466$ 2,118,529$ 20,205$ 34,027,787$

Excess (deficiency) of revenues over (under) expenditures (1,061,821)$ 3,239$ 1,001,428$ 23,058$ (20,205)$ (54,301)$

OTHER FINANCING SOURCES (USES) Transfers in -$ -$ -$ -$ 20,205$ 20,205$
Transfers out (266,092) - - - - (266,092)

Total other financing sources (uses) (266,092)$ -$ -$ -$ 20,205$ (245,887)$

Net change in fund balances (1,327,913)$ 3,239$ 1,001,428$ 23,058$ -$ (300,188)$
Fund balances - beginning 6,238,162 1,846,042 1,514,134 - - 9,598,338
Fund balances - ending 4,910,249$ 1,849,281$ 2,515,562$ 23,058$ -$ 9,298,150$

The accompanying notes to the financial statements are an integral part of this statement

County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2011

-19-

‘County of Russel, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds

For tho Year Endod June 30,2011,

Exnibits

REVENUES General property taxes Oterlacal taxes Perms, preg es, end regulatory oense: Fes ad otetues Revenue om he use of many ad proper Charges fr saris Miscolaneous Recovered oss Intergoverment revenues

Commerweath

Federal

Total eevenves

EXPENDITURES Curent: (Genera government insraor ‘del! sarnitrator Publi saley Public works Heath and watare Esucaton Pars, recreation, and cla Community devlpmen Nondepartnenal Capital projects Deb: service Pinca etement Interest nother scl charges Toll expenses

Excess (deioncy of revenues ve (under expenses

(OTHER FINANCING SOURCES (USES) Transl in Transl out

Total eter nancing sources uss,

Net change in fond balancee Fund balances being Fund aaron - ending

Industrial coal Rental Development Road Assistance Tol

Ss 135taa96 8 S 1354896 1555.98 : 1.787821 ea 918 236 72834

1206 1206

saaoz 3239 10373 - rao

240951, 240951,

{T1889 ‘r189

234919 mg19 aerrsi2 erase 8745306 2454979 - 2073753 : 4528722 F_2000,766 ae 214i ser 3 s973.006 S 1712850 s Ss 1712850 2108841 : : 2106661 5226797 5226797 3306813 76,486 4102279 5523318 : 2118528 20205 682052

5187 968 5187 968 586,723 586 723

2311 048 . - 2311048 ‘03.820 “03820 1590238 1510238 ‘79455 1704455 7a2921 azs21 Fase ELE Tae ps SSR TeT Ss (1ota2n) $ 3x0 $ 1001428 23088 (20208) $5400) s 8 “8 20205 § 20205 208 002 (286.002) Spe.) 5 = Ts S87, S$ (sa0791) $ 3u0 § — 1901428 23088 S$ 00.88) 6238.62 136002 1514134 9598 338

3 4si0n Satz 2518580 Boss 5009.50

‘The accompanying notes loth nancial statemenis are anneal pat ofthis tateman

-19-

Exhibit 6

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds (300,188)$

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which the capital outlays exceeded depreciation in the current period. (319,951)

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 134,580

The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. 1,957,742

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore are not reported as expenditures in governmental funds. (31,614)

Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 461,146

Change in net assets of governmental activities 1,901,715$

The accompanying notes to the financial statements are an integral part of this statement.

For the Year Ended June 30, 2011

County of Russell, Virginia Reconciliation of Statement of Revenues,

Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities

-20-

County of Russell, Virginia Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2011

Exhibit 6

‘Amounts reported for governmental activities inthe statement of activites are different because: "Net change in fund balances - total governmental funds

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over ther estimated useful ives and reported as depreciation expense. This is the amount by which the capital outlays exceeded depreciation in the current period.

Revenues in the statement of actives that do not provide current financial resources are ot reported as revenues in the funds.

‘The issuance of long-term debt (e.g, bonds, leases) provides current financial resources to governmental funds, while the repayment ofthe principal of long-term debt consumes the curent financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and simiar tems when debts fist issued, whereas these amounts are deferred and amortized inthe statement of actives. This amounts the net effect of these differences inthe treatment of long-term debt and related items,

‘Some expenses reported inthe statement of activites do not require the use of curent financial resources and, therefore are not reported as expenditures in govemmmental funds,

Internal service funds are used by management to charge the costs of certain activites, such as insurance and telecommunications, to individual funds, The net revenue (expense) of certain internal service funds is reported with governmental activities

Change in net assets of governmental activities

‘The accompanying notes tothe financial statements are an integral part ofthis statement

-20-

$ (200,188)

(319.951)

134,580

41,987,742

(31,614)

Exhibit 7

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

ASSETS Current assets:

Cash and cash equivalents 3$ 3,361,208$
Interest receivable 235 3,469 Accounts receivable, net of allowance for uncollectibles 4,612 -

Total current assets 4,850$ 3,364,677$
Noncurrent assets:

Restricted assets: Cash and cash equivalents (in custody of others) 49,572$ -$

Capital assets: Utility plant in service 5,240,699$ -$
Machinery and equipment 75,470 -
Less accumulated depreciation (1,799,525) -
Total capital assets 3,516,644$ -$
Total noncurrent assets 3,566,216$ -$
Total assets 3,571,066$ 3,364,677$

LIABILITIES Current liabilities:

Accounts payable 18,206$ 339,622$
Accrued interest payable 1,818 -
Bonds payable - current portion 18,602 -

Total current liabilities 38,626$ 339,622$

Noncurrent liabilities: Bonds payable - net of current portion 732,953$ -$

Total liabilities 771,579$ 339,622$

NET ASSETS Invested in capital assets, net of related debt 2,765,089$ -$
Restricted for debt service and bond covenants 49,572 -
Unrestricted (15,174) 3,025,055

Total net assets 2,799,487$ 3,025,055$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Net Assets

Proprietary Funds June 30, 2011

-21-

County of Russell, Virgi Statement of Net Assets Proprietary Funds June 30, 2011,

ASSETS Current assets: Cash and cash equivalents Interest receivable Accounts receivable, net of allowance for uncollectibles Total current assets Noncurrent assets: Restricted assets: ‘Cash and cash equivalents (in custody of others) Capital assets: Utility plantin service Machinery and equipment Less accumulated depreciation Total capital assets Total noncurrent assets, Total assets

LIABILITIES Current labilites: ‘Accounts payable ‘Accrued interest payable Bonds payable - current portion Total current labities

Noncurrent liabilities: Bonds payable - net of current portion Total abilities

NET ASSETS Invested in capital assets, net of related debt Restricted for debt service and bond covenants Unrestricted

Total net assets

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

$ 3S 3,361,208

235 3,469 612 850 _$ $ 49.572 $ : S 5,240,699 § .

S__ 351664 $s S 3,566,216 $ 5 s

3.571,066_$

$s 18,206 § 339,622 1818 : 18,602 :

$2,765,089 § -

The accompanying notes to the financial statements are an integral part ofthis statement.

Exhibit 8

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

OPERATING REVENUES Charges for services:

Sewer revenues 72,073$ -$
Insurance premiums - 6,106,050

Total operating revenues 72,073$ 6,106,050$

OPERATING EXPENSES Salaries and benefits 98,800$ -$
Professional services 59,176 -
Utilities 22,082 -
Materials and supplies 12,347 -
Office expenses 66,982 -
Insurance claims and expenses - 5,662,475 Depreciation 131,017 -

Total operating expenses 390,404$ 5,662,475$

Operating income (loss) (318,331)$ 443,575$

NONOPERATING REVENUES (EXPENSES) Investment earnings 234$ 17,571$
Interest expense (33,541) -

Total nonoperating revenues (expenses) (33,307)$ 17,571$
Income before contributions and transfers (351,638)$ 461,146$

Transfers in 245,887$ -$
Change in net assets (105,751)$ 461,146$

Total net assets - beginning 2,905,238$ 2,563,909$
Total net assets - ending 2,799,487$ 3,025,055$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Revenues, Expenses, and Changes in Fund Net Assets

Proprietary Funds For the Year Ended June 30, 2011

-22-

County of Russell, Virginia Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2011

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance OPERATING REVENUES Charges for services: Sewer revenues s 72073 $ : Insurance premiums 6,106,050 Total operating revenues g (06,050 OPERATING EXPENSES Salaries and benefits s 98,800 $ : Professional services 59,176 : sities 22,082 : Materials and supplies 12,347 : Office expenses 66,982 : Insurance claims and expenses : 5,662,475 Depreciation 131,017 Total operating expenses 3 390.404 $5,662,475 Operating income (loss) s 318,331) $ 443,575 NONOPERATING REVENUES (EXPENSES) Investment earnings s 234 § 17871 Interest expense (33,541 - Total nonoperating revenues (expenses) 3 (33,307) $ Tar Income before contributions and transfers $ 351,638) $ 761,146 Transfers in $ 245,887 _$ : Change in net assets $ (105,751) $ 461,146

Total net assets - beginning Total net assets - ending

‘The accompanying notes to the financial statements are an integral part ofthis statement.

-22-

Exhibit 9

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users 73,254$ -$
Receipts for insurance premiums - 6,106,050
Payments to suppliers (169,432) -
Payments to employees (98,800) -
Payments for premiums - (5,705,254)

Net cash provided (used) by operating activities (194,978)$ 400,796$

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 245,887$ -$

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on bonds (17,866)$ -$
Interest payments (33,580) -

Net cash provided (used) by capital and related financing activities (51,446)$ -$

CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received 537$ 20,210$

Net increase (decrease) in cash and cash equivalents -$ 421,006$

Cash and cash equivalents - beginning 49,575$ 2,940,202$
Cash and cash equivalents - ending 49,575$ 3,361,208$

Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) (318,331)$ 443,575$
Adjustments to reconcile operating income (loss) to net cash

provided (used) by operating activities: Depreciation expense 131,017$ -$
(Increase) decrease in accounts receivable 1,181 -
Increase (decrease) in accounts payable (8,845) (42,779)
Total adjustments 123,353$ (42,779)$

Net cash provided (used) by operating activities (194,978)$ 400,796$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Cash Flows

Proprietary Funds For the Year Ended June 30, 2011

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County of Russell, Virgi ‘Statement of Cash Flows

Proprietary Funds For the Year Ended June 30, 2014

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts for insurance premiums Payments to suppliers Payments to employees Payments for premiums Net cash provided (used) by operating activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES ‘Transfers from other funds

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on bonds Interest payments, Net cash provided (used) by capital and related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - beginning Cash and cash equivalents - ending

Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (oss)

‘Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense (Increase) decrease in accounts receivable Increase (decrease) in accounts payable Total adjustments Net cash provided (used) by operating activities

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

$ 73,254 $ :

: 6,106,050 (169,432) - (98,800) :

—e 08 254) (194.978) $

245,887_$ : $ (17,866) $ : (33,580) :

$ (51,446) $ -

$ -$ 421,006

49575 _$ 2,940,202 i

$318,331) $ 443.575

$131,017 $ : 4,181 : (8,845) (42,779) 3 123,353 (42,779) S_ (194,978) $ 400,796

The accompanying nates to the financial statements are an integral part ofthis statement.

-23-

Exhibit 10

Agency Funds

ASSETS Cash and cash equivalents 62,816$

Total assets 62,816$

LIABILITIES Amounts held for Social Services clients 62,816$

Total liabilities 62,816$

The accompanying notes to the financial statements are an integral part of this statement.

County of Russell, Virginia Statement of Fiduciary Net Assets

Fiduciary Fund June 30, 2011

-24-

it10 County of Russell, Virginia Statement of Fiduciary Net Assets

June 30, 2044

ASSETS Cash and cash equivalents Total assets

LIABILITIES. Amounts held for Social Services clients, Total liabilities

‘The accompanying notes tothe financial statements are an integral pat of this statement.

2d.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies:

The financial statements of the County conform to generally accepted accounting principles (GAAP) applicable to governmental units promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant policies:

A. Reporting Entity

The County of Russell, Virginia is a municipal corporation governed by an elected six-member Board of Supervisors. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is legally separate from the government.

Blended component units - None

Discretely Presented Component Units - The component unit columns in the financial statements include the financial data of the County’s discretely presented component units. They are reported in a separate column to emphasize that they are legally separate from the County.

The Russell County School Board operates the elementary and secondary public schools in the County. School Board members are popularly elected. The School Board is fiscally dependent upon the County because the County approves all debt issuances of the School Board and provides significant funding to operate the public schools since the School Board does not have separate taxing powers. The School Board is presented as a governmental fund type. The School Board does not issue separate financial statements.

The Russell County Industrial Development Authority (IDA) encourages and provides financing for industrial development in Russell County. The financial statements of the IDA should have been included because the County appoints the governing body and has made moral obligation resolutions to finance deficits of any kind or nature that may occur each year subject to annual appropriation. Complete financial statements of the IDA can be obtained in writing at 137 Highland Drive, Lebanon, VA 24266.

The Castlewood Water and Sewage Authority of Russell County provides water and sewer service to residents of Russell County. The Authority is fiscally dependent on the County because the County appoints the governing body and has financing guarantees involving the Authority. Complete financial statements of the Authority can be obtained in writing at P.O. Box 655, Castlewood, VA 24224.

The Russell County Public Service Authority (PSA) provides water and sewer service to residents of Russell County. The Authority is fiscally dependent on the County because the County appoints the governing body and has financing guarantees involving the Authority.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies:

A. Reporting Entity

The County of Russell, Virginia is a municipal corporation governed by an elected six-member Board of Supervisors. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Each discretely presented component unitis reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that its legally separate from the government.

Blended component units - None

-25-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

A. Reporting Entity (continued)

Related Organizations - The County’s officials are also responsible for appointing the members of the boards of other organizations, but the county’s accountability for these organizations does not extend beyond making the appointment.

Jointly Governed Organizations - The County, in conjunction with other local jurisdictions, participates in supporting the Southwest Virginia Regional Jail and the Cumberland Mountain Community Services Board. The governing bodies of these organizations are appointed by the respective governing bodies of the participating jurisdictions.
During the year, the County contributed $1,781,659 to the Regional Jail and $49,095 to the Community Services Board. The County does not have any ongoing financial responsibility for these Organizations.

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds, if any, are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

Reporting Entity (continued)

Jointly Governed Organizations - The County, in conjunetion with other local jurisdictions, participates in supporting the Southwest Virginia Regional Jail and the Cumberland Mountain Community Services Board. The governing bodies of these organizations are appointed by the respective governing bodies ofthe participating jurisdictions. During the year, the County contributed $1,781 659 to the Regional Jail and $49,095 to the Community Services Board. The County does not have any ongoing financial responsibilty for these Organizations.

Government-wide and Fund Financial Statements.

The government-wide financial statements (.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-ype activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary governments financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements ofa particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements, Major individual governmental funds and major individual enterprise funds, if any, are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements, Revenues are recorded when earned and expenses are recorded when a lability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as Soon as all eligibility requirements imposed by the provider have been met.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation: (continued)

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Accordingly, real and personal property taxes are recorded as revenues and receivables when billed, net of allowances for un- collectible amounts. Property taxes not collected within 60 days after year-end are reflected as deferred revenues.

Sales and utility taxes, which are collected by the state or utilities and subsequently remitted to the County, are recognized as revenues and receivables upon collection by the state or utility, which is generally in the month preceding receipt by the County.

Licenses, permits, fines and rents are recorded as revenues when received. Intergovernmental revenues, consisting primarily of federal, state and other grants for the purpose of funding specific expenditures, are recognized when earned or at the time of the specific expenditure. Revenues from general-purpose grants are recognized in the period to which the grant applies. All other revenue items are considered to be measurable and available only when the government receives cash.

The government reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in other funds. The General Fund includes the activities of the Social Services, E-911, Dog Tag, Damage Stamp, Revenue Anticipation Note, Law Library, and Knox Creek Funds . The aforementioned Funds have been merged with the General Fund for financial reporting purposes.

The Industrial Development, Coal Road, Workforce Investment Board, and Rental Assistance Funds serve as the County’s major Special Revenue Funds. The Industrial Development Fund accounts for financial resources to be used for industrial and community development benefiting the County. The Industrial Development Fund includes activities aimed at attracting and retaining industrial prospects in Russell County. The Coal Road Fund accounts for financial resources to be used for improvements to roads used in conjunction with coal mining and other expenses allowable by the Code of Virginia, (1950), as amended. The Workforce Investment Board Fund accounts for financial resources to be used for workforce development benefiting the County. The Rental Assistance Fund accounts for the financial resources used to assist low income families with rental expenses.

-27-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

Measurement Focus, Basis of Accounting, and Financial Statement Presentation: (continued)

The government reports the following major governmental funds:

The General Fundis the government’s primary operating fund, Itaccounts for all financial resources of the general government, except those required to be accounted for in other funds. The General Fund includes the activities of the Social Services, E-911, Dog Tag, Damage Stamp, Revenue Anticipation Note, Law Library, and Knox Creek Funds . The aforementioned Funds have been merged with the General Fund for financial reporting purposes

-2-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation: (continued)

The government reports the following major proprietary funds:

The County operates a water treatment system. The activities of the system are accounted for in the Dante System fund.

Additionally, the government reports the following fund types:

Internal Service Funds account for the financing of goods and services provided to other departments or agencies of the government, or to other governments, on a cost reimbursement basis. The Internal Service Funds consist of the Self Health Insurance Funds.

Fiduciary funds account for assets held by the government in a trustee capacity or as agent or custodian for individuals, private organizations, other governmental units, or other funds. Agency funds include the Special Welfare Account Fund. The Special Welfare Account Fund includes activity of the Title XX and the SSI Fund, which have all been merged for financial reporting purposes.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the government’s functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes.

Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the County’s Internal Service Funds are charges to departments for health insurance. Operating expenses for Internal Service Funds include the cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, and then unrestricted resources as they are needed.

-28-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation: (continued) The government reports the following major proprietary funds:

The County operates a water treatment system. The activities of the system are accounted for in the Dante System fund

‘Additionally, the government reports the following fund types:

Intemal Service Funds account forthe financing of goods and services provided to other departments or agencies of the government, orto other governments, on a cost reimbursement basis. The Internal Service Funds consist of the Self Health Insurance Funds.

Fiduciary funds account for assets held by the government in a trustee capacity or as agent or custodian for individuals, private organizations, other governmental units, or other funds. Agency funds include the Special Welfare Account Fund. The Special Welfare Account Fund includes activity ofthe Title XX and the SSI Fund, which have all been merged for financial reporting purposes.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards donot conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance.

‘As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the government’s functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concemed.

‘Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

When both restricted and unrestricted resources are available for use, itis the government’s policy to use restricted resources first, and then unrestricted resources as they are needed.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity

Deposits and Investments

The government’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

Property Taxes

Property is assessed at its value on January 1. Property taxes attach as an enforceable lien on property as of January 1. Real estate taxes are payable in installments on June 5th and December 5th. Personal property taxes are due and collectible on December 5th. The County bills and collects its own property taxes.

Allowance for Uncollectible Accounts

The County calculates its allowance for uncollectible accounts using historical collection data and, in certain cases, specific account analysis. The allowance amounted to approximately $1,030,279 at June 30, 2011 and is comprised solely of property taxes.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

-29-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity

Deposits and Investments

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds’ (ie., the current portion of interfund loans) or “advances to/from other funds" (i., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

‘Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources,

Property Taxes

Property is assessed at is value on January 1. Property taxes attach as an enforceable lien on property as of January 1. Real estate taxes are payable in installments on June 5! and December 5. Personal property taxes are due and collectible on December 5. The County bills and collects its own property taxes. Allowance for Uncollectible Accounts

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires

management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

-29-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued)

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant, and equipment of the primary government, as well as the Component Unit – School Board, are depreciated using the straight line method over the following estimated useful lives:

Assets Years

Buildings 40

Building improvements 40

Structures, lines, and accessories 20-40

Machinery and equipment 4-30

Compensated Absences

Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In accordance with the provisions of Governmental Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. The County accrues salary-related payments associated with the payment of compensated absences. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements.

The remainder of this page left blank intentionally.

-30-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued)

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental column in the government-wide financial statements. Capital assets are defined by the govemmment as assets with an inital, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed,

Property, plant, and equipment ofthe primary government, as well as the Component Unit - School Board, are depreciated using the straight line method over the following estimated useful lives:

Assets Years Buildings 40 Building improvements 40 Structures, lines, and accessories 20-40 Machinery and equipment 4:30

Compensated Absences

Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In accordance withthe provisions of Governmental Accounting Standards No. 16, Accounting for Compensated ‘Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. The County accrues salary-related payments associated with the payment of compensated absences. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements.

The remainder of this page left blank intentionally.

-30-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued)

Long-term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Equity

Beginning with fiscal year 2011, the County implemented GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balance more transparent. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

 Nonspendable fund balance – amounts that are not in spendable form (such as inventory and prepaid

expenditures) or are required to be maintained intact (corpus of a permanent fund);  Restricted fund balance – amounts constrained to specific purposes by their providers (such as

grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation;

 Committed fund balance – amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint;

 Assigned fund balance – amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority;

 Unassigned fund balance – amounts that are available for any purpose; positive amounts are only reported in the general fund.

-31-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued) 8. Long-term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liablities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net ofthe applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

Inthe fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Equity

Beginning with fiscal year 2011, the County implemented GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balance more transparent. The following classifications describe the relative strength ofthe spending constraints placed on the purposes for which resources can be used:

= Nonspendable fund balance - amounts that are not in spendable form (such as inventory and prepaid expenditures) or are required to be maintained intact (corpus of a permanent fund);

= Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation;

= Committed fund balance - amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint;

= Assigned fund balance - amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority;

= Unassigned fund balance - amounts that are available for any purpose; positive amounts are only reported in the general fund.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued)

Fund Equity (continued)

The Board of Supervisors is the highest level of decision making authority and the formal action that is required to establish, modify or rescind a fund balance commitment is a resolution approved by the Board of Supervisors. The resolution must either be approved or rescinded as applicable, prior to the last day of the fiscal year for which the commitment is made. The amount subject to the constraint may be determined in the subsequent period.

The Board of Supervisors has authorized the County Administrator as the official authorized to assign fund balance to a specific purpose as approved by the fund balance policy.

The County of Russell will maintain an unassigned fund balance in the general fund equal to 16% of the expenditures/operating revenues (two months). The County considers a balance of less than 10% to be a cause for concern, barring unusual of deliberate circumstances.

The County considers restricted fund balance to be spent when an expenditure is incurred for purposes for which restricted and unassigned, assigned, or committed fund balances are available, unless prohibited by legal documents or contracts. When an expenditure is incurred for purposes for which committed, assigned or unassigned amounts are available, the County considers committed fund balance to be spent first, then assigned fund balance, and lastly unassigned fund balance.

Net Assets

Net assets are the difference between assets and liabilities. Net assets invested in capital assets represent capital assets, less accumulated depreciation less any outstanding debt related to the acquisition, construction or improvement of those assets.

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-32-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 1-Summary of Significant Accounting Policies: (continued)

D. Assets, Liabilities, and Net Assets or Equity (continued)

Fund Equity (continued)

The Board of Supervisors is the highest level of decision making authority and the formal action that is required to establish, modify or rescind a fund balance commitment is a resolution approved by the Board of Supervisors. The resolution must either be approved or rescinded as applicable, prior tothe last day of the fiscal year for which the commitment is made. The amount subject to the constraint may be determined in the subsequent period.

The Board of Supervisors has authorized the County Administrator as the official authorized to assign fund balance to a specific purpose as approved by the fund balance policy.

The County of Russell will maintain an unassigned fund balance in the general fund equal to 16% of the expendituresloperating revenues (two months). The County considers a balance of less than 10% to be a cause for concern, barring unusual of deliberate circumstances.

The County considers restricted fund balance to be spent when an expenditure is incurred for purposes for which restricted and unassigned, assigned, or committed fund balances are available, unless prohibited by legal documents or contracts. When an expenditure is incurred for purposes for which committed, assigned of unassigned amounts are available, the County considers committed fund balance to be spent first, then assigned fund balance, and lastly unassigned fund balance.

Net Assets Net assets are the difference between assets and liabilities. Net assets invested in capital assets represent

capital assets, less accumulated depreciation less any outstanding debt related to the acquisition, construction or improvement of those assets.

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-32-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements:

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide

statement of net assets.

The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net assets-governmental activities as reported in the government-wide statements of net assets. One element of that reconciliation explains that long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. The details of these $(21,352,387) and $(1,028,885) differences for the primary government and discretely presented component unit-School Board, respectively, are as follows:

Primary School

Government Board

Bonds and literary loans payable $ (18,712,089) $ -

Lease purchase agreements (357,060) -

Unamortized premium (300,119) -

Accrued interest payable (353,065) -

Landfill accrued closure and postclosure monitoring costs (1,100,775) -

Early Retirement Incentive - (50,000)

Net OPEB Obligation (7,153) (48,377)

Compensated absences (522,126) (930,508)

Net adjustment to reduce fund balance-total governmental funds to arrive at net assets-governmental activities $ (21,352,387) $ (1,028,885)

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements:

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide

statement of net assets.

The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net assets-governmental activities as reported in the government-wide statements of net assets. One element of that reconciliation explains that long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. The details of these (21,352,387) and $(1,028,885) differences for the primary government and discretely presented component unit-School Board, respectively, are

as follows: Primary Government

Bonds and literary loans payable $ (18,712,089) Lease purchase agreements (357,060) Unamortized premium (300,119) Accrued interest payable (353,065) Landfill accrued closure and postclosure monitoring costs (1,100,775) Early Retirement Incentive

Net OPEB Obligation (7.153) ‘Compensated absences (622,126) Net adjustment to reduce fund balance-total governmental funds

to arrive at net assets-governmental activities $ (21,352,387)

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-33-

School Board

(60,000) (48,377)

(930,508)

(1,028,885)

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and

changes in fund balances and the government-wide statement of activities

The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances-total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains, “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of these $(319,951) and $(456,545) for the primary government and discretely presented component unit-School Board, respectively, are as follows:

Component

Unit

Primary School

Government Board

Capital outlays $ 918,348 $ 134,034

School debt financed assets (392,380) 392,380

School debt financed depreciation 313,905 (313,905)

Capital asset deletions (net) - (17,467)

Depreciation expense (1,159,824) (651,587)

Net adjustment to increase (decrease) net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (319,951) $ (456,545)

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and

changes in fund balances and the government-wide statement of activities

The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances-total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains, “Governmental funds report capital outlays as expenditures, However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of these $(319,951) and $(456,545) for the primary government and discretely presented

component unit-School Board, respectively, are as follows:

Component Unit Primary School Government Board Capital outlays. $ 918,348 § 134,034 ‘School debt financed assets (392,380) 392,380 ‘School debt financed depreciation 313,905 (313,905) Capital asset deletions (net) - (17,467) Depreciation expense (1,159,824) (651,587) Net adjustment to increase (decrease) net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (319,951) $ (456,545)

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and

changes in fund balances and the government-wide statement of activities (continued)

Another element of that reconciliation states “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets.
Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.” The details of this $1,957,742 difference in the primary government are as follows:

Primary

Government

Principal Payments:

Accrued landfill closure/postclosure $ 163,287

Bonds, literary loans, and notes 1,450,205

Lease purchase agreements 344,250
Net adjustment to increase (decrease) net changes in fund balances

total governmental funds to arrive at changes in net assets of governmental activities $ 1,957,742

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities (continued)

Another element ofthat reconciliation states “the issuance of long-term debt (e.9., bonds, leases) provides current financial resources to governmental funds, while the repayment ofthe principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets.

Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debtis first issued, whereas these amounts are deferred and amortized in the statement of activities.” The details ofthis $1,957,742 difference in the primary government are as follows:

Primary Government

Principal Payments:

‘Accrued landfill closure/postclosure $ 163,287

Bonds, iterary loans, and notes 1,450,205

Lease purchase agreements 344,250 Net adjustment to increase (decrease) net changes in fund balances. ~~~

total governmental funds to arrive at changes in net assets of governmental activities $ 4,957,742

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and

changes in fund balances and the government-wide statement of activities (continued)

Another element of that reconciliation states, “Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this $(31,614) and $35,693 difference for the primary government and discretely presented component unit-School Board, respectively, are as follows:

Primary Component Unit

Government School Board

(Increase) decrease in compensated absences $ (16,267) $ 100,070

(Increase) decrease in accrued interest (29,947) -

(Increase) decrease in early retirement incentive - (50,000)

(Increase) decrease in net OPEB obligation (2,204) (14,377)

Amortization of bond premium 16,804 -

Net adjustment to increase (decrease) net changes in fund balances-total governmental funds to arrive at changes in net assets of governmental activities $ (31,614) $ 35,693

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 2-Reconciliation of Government-Wide and Fund Financial Statements: (continued)

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities (continued)

Another element ofthat reconciliation states, “Some expenses reported inthe statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this $(31,614) and $35,693 difference for the primary government and discretely presented component unit-School Board, respectively, are as follows:

Primary ‘Component Unit Government School Board

(Increase) decrease in compensated absences $ (16.267) $ 100,070 (Increase) decrease in acerued interest (29,947) : (Increase) decrease in early retirement incentive : (60,000) (Increase) decrease in net OPEB obligation (2,204) (14,377) ‘Amortization of bond premium 16,804 Net adjustment to increase (decrease) net changes in fund balances-total governmental funds to arrive at changes in net assets of governmental activities § (31,614) § 35,693

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 3-Stewardship, Compliance, and Accountability:

A. Budgetary Information

The following procedures are used by the County in establishing the budgetary data reflected in the financial statements:

Prior to March 30, the County Administrator submits to the Board of Supervisors a proposed operating and

capital budget for the fiscal year commencing the following July 1. The operating and capital budget includes proposed expenditures and the means of financing them. All Funds of the County have legally adopted budgets with the exception of the Industrial Development Authority Fund and Agency Funds.

Public hearings are conducted to obtain citizen comments.
Prior to June 30, the budget is legally enacted through passage of an Appropriations Resolution.
The Appropriations Resolution places legal restrictions on expenditures at the function level. Only the Board

of Supervisors can revise the appropriation for each department or category. The County Administrator is authorized to transfer budgeted amounts within general government departments; however, the School Board is authorized to transfer budgeted amounts within the school system’s categories.

Formal budgetary integration is employed as a management control device during the year for the General

Fund, and the Special Revenue Funds (except the School Fund). The School Fund is integrated only at the level of legal adoption.

All budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
Appropriations lapse on June 30, for all County units.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the

expenditure of monies are recorded in order to commit that portion of the applicable appropriations, is not part of the County’s accounting system.

B. Excess of expenditures over appropriations

The County had numerous departments and funds that had excess expenditures over appropriations in the current year. Those departments can be found on Schedule 2 starting on page 80 of this report.

C. Deficit fund equity

At June 30, 2011, there were no funds which had deficit fund equity.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 3-Stewardship, Compliance, and Accountability:

‘A. Budgetary Information

The following procedures are used by the County in establishing the budgetary data reflected in the financial statements:

Prior to March 30, the County Administrator submits to the Board of Supervisors a proposed operating and capital budget forthe fiscal year commencing the following July 1. The operating and capital budget includes proposed expenditures and the means of financing them. All Funds of the County have legally adopted budgets with the exception of the Industrial Development Authority Fund and Agency Funds.
Public hearings are conducted to obtain citizen comments
Prior to June 30, the budget is legally enacted through passage of an Appropriations Resolution.

4, The Appropriations Resolution places legal restrictions on expenditures atthe function level. Only the Board of Supervisors can revise the appropriation for each department or category. The County Administrator is authorized to transfer budgeted amounts within general government departments; however, the School Board is authorized to transfer budgeted amounts within the school system’s categories.

Formal budgetary integration is employed as a management control device during the year for the General Fund, and the Special Revenue Funds (except the School Fund). The School Fund is integrated only at the level of legal adoption
All budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
Appropriations lapse on June 30, for all County units.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to commit that portion of the applicable appropriations, is not part of the County’s accounting system.

B. Excess of expenditures over appropriations

The County had numerous departments and funds that had excess expenditures over appropriations in the current year. Those departments can be found on Schedule 2 starting on page 80 of this report.

C. Deficit fund equity

At June 30, 2011, there were no funds which had deficit fund equity.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 4-Deposits and Investments:

Deposits:

Deposits with banks are covered by the Federal Deposit Insurance Corporations (FDIC) and collateralized in accordance with the Virginia Security for Public Deposits Act (the “Act”) Section 2.2-4400 et. seq. of the Code of Virginia. Under the Act, banks and savings institutions holding public deposits in excess of the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury Board. Financial Institutions may choose between two collateralization methodologies and depending upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess deposits. Accordingly, all deposits are considered fully collateralized.

Investments:

Statutes authorize local governments and other public bodies to invest in obligations of the United States or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof, obligations of the International Bank for Reconstruction and Development (World Bank), the Asian Development Bank, the African Development Bank, “prime quality” commercial paper and certain corporate notes, banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP).

Custodial Credit Risk Custodial credit risk is the risk that, in the event of the failure of the counterparty, the County will not be able to

recover the value of its investments or collateral securities that are in the possession of an outside party. The County’s investments at June 30, 2011 were held in the County’s name by the County’s custodial bank. The State Non-Arbitrage (SNAP) Pools are not exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Credit Risk of Debt Securities The County’s rated debt investments as of June 30, 2011 were rated by Standard and Poor’s and/or an equivalent

national rating organization and the ratings are presented below using the Standard and Poor’s rating scale.

Rated Debt Investments Fair Quality Ratings

AAAm

SNAP 139,638$

County’s Rated Debt Investments’ Values

Concentration of Credit Risk

At June 30, 2011, the County did not have any investments meeting the GASB 40 definition requiring concentration of credit risk disclosures that exceeded 5% of total investments.

The State Non-Arbitrage Pool (SNAP) is an open-end management investment company registered with the Securities and Exchange Commission (SEC).

Interest Rate Risk There are no interest rate risk disclosures required for the year ended June 30, 2011.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 4-Deposits and Investments:

Deposits: Deposits with banks are covered by the Federal Deposit Insurance Corporations (FDIC) and collateralized in

accordance with the Virginia Security for Public Deposits Act (the “Act”) Section 2.2-4400 et. seq. of the Code of Virginia. Under the Act, banks and savings institutions holding public deposits in excess of the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury Board. Financial Institutions may choose between two collateralization methodologies and depending upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess deposits. Accordingly, all deposits are considered fully collateralized

Investments: Statutes authorize local governments and other public bodies to invest in obligations of the United States or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof, obligations of the International Bank for Reconstruction and Development (World Bank), the Asian Development Bank, the African Development Bank, “prime quality’ commercial paper and certain corporate notes, banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP).

Custodial Credit Risk Custodial credit risk is the risk that, in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County’s investments at June 30, 2011 were held in the County’s name by the County’s custodial bank. The State Non-Arbitrage (SNAP) Pools are not exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form.

Credit Risk of Debt Seourities The County’s rated debt investments as of June 30, 2011 were rated by Standard and Poor’s and/or an equivalent national rating organization and the ratings are presented below using the Standard and Poor’s rating scale.

County’s Rated Debt Investments’ Values

Rated Debt Investments Fair Quality Ratings AAA SNAP $ 739,638 Concentration of Credit Risk

‘At June 30, 2011, the County did not have any investments meeting the GASB 40 definition requiring concentration of credit risk disclosures that exceeded 5% of total investments.

The State Non-Arbitrage Pool (SNAP) is an open-end management investment company registered with the Securities and Exchange Commission (SEC)

Interest Rate Risk There are no interest rate risk disclosures required for the year ended June 30, 2011

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 5-Due from Other Governmental Units:

The following amounts represent receivables from other governments at year-end:

Primary Component Unit

Government School Board

Workforce Investment Board:

Workforce Investment funds $ 261,526 $ -

Commonwealth of Virginia:

Local sales tax 343,686 -

State sales tax - 536,656

Non-categorical aid 170,834 -

Categorical aid-shared expenses 195,584 -

Categorical aid-Virginia Public Assistance funds 168,240 -

Categorical aid-Comprehensive Services Act funds 334,619 -

Federal Government:

Categorical aid-Virginia Public Assistance funds 160,675 -

Categorical aid-other 7,320 1,566,599

Total Amount Due from Other Governmental Units $ 1,642,484 $ 2,103,255

Note 6-Interfund/Component-Unit Obligations:

Due to Primary Due from Primary

Government/ Government/

Component Unit Component Unit

Primary Government: General Fund $ 425,000 $ 200,000

Component Unit: IDA $ 200,000 $ 425,000

Fund

-39-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 5-Due from Other Governmental Units:

The following amounts represent receivables from other governments at year-end:

Primary Component Unit Government School Board Workforce Investment Board: Workforce Investment funds S 261,526 § Commonwealth of Virginia Local sales tax 343,686 : State sales tax - 536,656 Non-categorical aid 170,834 Categorical aid-shared expenses 195,584 Categorical aid-Virginia Public Assistance funds 168,240 Categorical aid-Comprehensive Services Act funds 334,619 Federal Government: Categorical aid-Virginia Public Assistance funds 160,675, : Categorical aid-other 7,320 1,568,599 Total Amount Due from Other Governmental Units $1,642,484 § 2,103,255 Note 6-Interfund/Component-Unit Obligations: Due to Primary Due from Primary Goverment! Government! Fund Component Unit _ Component Unit Primary Government:

General Fund

Component Unit: IDA

§ 425,000 $

$__z0000_s

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 6-Interfund/Component-Unit Obligations: (continued)

Interfund transfers and remaining balances for the year ended June 30, 2011, consisted of the following:

Transfers In Transfers Out

Primary Government: General Fund -$ 266,092$
Dante Fund 245,887 -
Rental Assistance Fund 20,205 -
Total 266,092$ 266,092$

Primary Government: Due From Due To General Fund 114,126$ -$
Coal Road Fund - 2,906
Workforce Investment Fund - 111,220
Total 114,126$ 114,126$

Fund

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgeting authorization.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 6-Interfund/Component-Unit Obligations: (continued)

Interfund transfers and remaining balances for the year ended June 30, 2011, consisted of the following:

Fund Transfers In Transfers Out

Primary Government:

General Fund $ - $266,092 Dante Fund 245,887 : Rental Assistance Fund 20,205 : Total 266,092 266,092 Primary Government: Due From Due To General Fund 3 1416 «S - Coal Road Fund - 2,906 Workforce Investment Fund 111,220

Total 114,126

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt:

Primary Government - Governmental Activity Indebtedness

The following is a summary of long-term debt transactions of the County for the year ended June 30, 2011:

Balance Balance

July 1, 2010 Issuances Retirements June 30, 2011

General obligation bonds $ 10,905,464 $ - $ (822,236) $ 10,083,228

Literary loans 3,417,144 - (426,281) 2,990,863

Revenue bonds 4,847,048 - (201,688) 4,645,360

Literary anticipation note 992,638 - - 992,638

Deferred Amounts:

Bond premiums 316,923 - (16,804) 300,119

Lease purchase agreements 701,310 - (344,250) 357,060

Landfill closure/

postclosure liability 1,264,062 - (163,287) 1,100,775

OPEB obligation 4,949 42,373 (40,169) 7,153

Compensated absences 505,859 395,661 (379,394) 522,126

Total $ 22,955,397 $ 438,034 $ (2,394,109) $ 20,999,322

Annual requirements to amortize long-term debt and related interest are as follows:

Year Ending

June 30, Principal Interest Principal Interest Principal Interest

2012 $ 611,579 $ 463,347 $ 426,278 $ 70,259 $ 201,689 $ -

2013 717,972 437,035 375,977 59,711 201,688 -

2014 611,026 403,830 375,977 50,671 201,688 -

2015 627,696 372,805 375,977 41,632 201,688 -

2016 644,976 340,870 375,977 32,593 201,688 -

2017-2021 3,395,731 1,224,392 1,035,677 51,425 1,008,442 -

2022-2026 2,311,790 519,960 25,000 750 1,008,442 -

2027-2031 1,162,458 115,772 - - 1,008,442 -

2032-2036 - - - - 569,552 -

2037 - - - - 42,042 -

Totals $ 10,083,228 $ 3,878,011 $ 2,990,863 $ 307,041 $ 4,645,361 $ -

General Obligation Bonds Literary Loans Revenue Bonds

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt:

Primary Government - Governmental Activity Indebtedness

The following is a summary of long-term debt transactions of the County for the year ended June 30, 2011

Balance Balance

July 1.2010 _Issuances__Retirements__June 30, 2011 General obligation bonds $ 10,905.464 $ = $ (622,236) $§ 10,083,228 Literary loans 3,447,144 : (426,281) 2,990,863, Revenue bonds 4,847,048 - (201,688) 4,645,360 Literary anticipation note 992,638 - 992,638 Deferred Amounts:

Bond premiums 316,023 (16,804) 300,119 Lease purchase agreements 701,310 (344,250) 357,060 Landfill closure!

postelosure liability 4,264,062 : (163,287) 4,100,775 OPEB obligation 4,949 42373 (40,169) 7,183 Compensated absences 505,859 395,661 (379,394) 522,126

Total $22,955,307 $ 498,034 $ (2,394,109) $ 20,999,322

‘Annual requirements to amortize long-term debt and related interest are as follows:

Year Ending General Obligation Bonds Literary Loans Revenue Bonds June 30, Principal interest Principal interest Principal Interest 2012 $ ~—«61,679 $463,347 $426,278 $ «70,259: $ 201,689 $ 2013 717.972 437,035 315,977 59,711 201,688

2014 611,026 403,830, 375,977 50,671 201,688

2015 627,696 372,805 375,977 41,632 201,688

2016 644,976 340,870 375,977 32,593 201,688 2017-2021 3,395,731 4,224,392 4,035,677 51,425 1,008,442 2022-2026 23311,790 519,960 25,000 750 1,008,442 2027-2031 4,162,458 415,772 : : 1,008,442 2032-2036 : : : : 569,552

2037 : : : : 42,042

Totals $10,083,228 $§ 3,878,011 $ 2990863 $ 307,041 $ 4,645,961 $

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government - Governmental Activity Indebtedness (continued)

Details of long-term indebtedness:

Final Amount of Balance Amount Interest Date Maturity Original Governmental Due Within Rates Issued Date Issue Activities One Year

General Obligation and Revenue Bonds: General obligation bond 4.85%-6.60% 1991 2012 133,833$ 9,681$ 9,681$
General obligation bond 4.90%-6.35% 1992 2013 1,812,215 122,268 -
General obligation bond 6.40%-7.17% 1994 2012 3,620,000 35,000 5,000
General obligation bond 5.10%-6.10% 1995 2016 325,000 60,000 -
General obligation bond 5.10%-6.10% 1997 2016 140,000 35,000 35,000
General obligation bond 4.10%-5.23% 1999 2019 510,000 225,000 25,000
General obligation bond 4.98%-5.10% 2000 2021 1,802,210 1,022,382 90,263
General obligation bond 2.35%-5.10% 2002 2023 4,382,954 2,834,667 206,080
General obligation bond 4.60%-5.10% 2006 2027 3,205,190 2,679,230 140,555
General obligation bond 4.60%-5.10% 2009 2030 1,485,000 1,440,000 50,000
General obligation bond 3.05%-5.05% 2010 2031 1,620,000 1,620,000 50,000
General obligation/Revenue bond 0.00% 11/28/2001 2033 935,690 654,983 31,190
General obligation/Revenue bond 0.00% 11/28/2001 2033 1,678,400 1,180,478 55,947
General obligation/Revenue bond 0.00% 11/1/2002 2033 822,366 589,362 27,412
General obligation/Revenue bond 0.00% 10/14/2005 2036 91,439 76,199 3,048
General obligation/Revenue bond 0.00% 10/14/2005 2037 1,906,717 1,620,709 63,557
General obligation/Revenue bond 0.00% 4/28/2006 2037 415,513 353,186 13,851
General obligation/Revenue bond 0.00% 3/30/2007 2037 197,179 170,443 6,684

Subtotal General Obligation and Revenue Bonds 14,728,588$ 813,268$
Plus: Unamortized Premium 300,119$ 16,804$

Total General Obligation and Revenue Bonds 15,028,707$ 830,072$

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government - Governmental Activity Indebtedness (continued)

Details of long-term indebtedness:

Final Amount of Balance Amount Interest Date Maturity Original ©» Governmental-—-Due Within Rates Issued Date Issue Activities One Year

General Obligation and Revenue Bonds: General obligation bond 4.85%-6.60% 1991 2012 $133,833 § 9681 $ 9,681 General obligation bond 4.90%-6.5% 1992 2013 1,812,215 122,268 : General obligation bond 6.40%-7.17% 1994 2012 3,620,000 35,000 5,000 General obligation bond 5.10%6.10% 1995 2016 325,000 60,000 - General obligation bond 5.10%-6.10% 1997 2016 140,000 35,000 35,000 General obligation bond 410%-5.23% 1999 2019 510,000 225,000 25,000 General obligation bond 4.98%5.10% 2000 2021 1,802,210 1,022,382 90,263 General obligation bond 2.35%5.10% 2002 2023 4,382,954 2,834,667 206,080 General obligation bond 4.60%5.10% 2006 2027 3,205,190 2,679,230 140,555 General obligation bond 4.60%5.10% 2009 2030 1,485,000 1,440,000 50,000 General obligation bond 3.05%-5.05% 2010 2031 1,620,000 1,620,000 50,000 General obligation/Revenue bond 0.00% © 11/28/2001 2033 935,690 654,983 31,190 General obigation/Revenue bond 0.00% © 11/28/2001 2033 1,678,400 1,180,478 55,947 General obligation/Revenue bond 0.00% 11/1/2002 2083 822,366 589,362 272 General obligation/Revenue bond 0.00% 10/14/2005 2036 91,439 76,199 3,048 General obligation/Revenue bond 0.00% 10/14/2005 2087 1,906,717 1,620,708 63,557 General obligation/Revenue bond 0.00% 472820082037 415513 353,186 13,851 General obligation/Revenue bond 0.00% 3130720072037 197.179 170,443 6,684 Subtotal General Obligation and Revenue Bonds BOBS 819,268 Plus:

Unamortized Premium $ 300,119 $16,804 Total General Obligation and Revenue Bonds TSB TOT_S 630,072

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government - Governmental Activity Indebtedness (continued)

Details of long-term indebtedness: (continued)

Final Amount of Balance Amount Interest Date Maturity Original Governmental Due Within Rates Issued Date Issue Activities One Year

Literary loans: Literary loan 3.00% 12/15/1981 2012 176,504$ Literary loan 3.00% 12/15/1981 2012 293,797 Literary loan 3.00% 12/15/1981 2012 194,990 Literary loan 3.00% 12/15/1981 2012 1,019,500 Literary loan 3.00% 7/15/1986 2017 960,000 Literary loan 3.00% 7/15/1986 2017 2,000,000 Literary loan 3.00% 2/1/1988 2018 530,999 Literary loan 3.00% 2/1/1988 2018 358,151 Literary loan 3.00% 2/1/1988 2018 84,805 Literary loan 3.00% 2/1/1988 2018 281,079 Literary loan 3.00% 2/1/1988 2018 196,873 Literary loan 2.00% 1/1/2000 2020 1,155,140 Literary loan 2.00% 3/15/1999 2019 1,114,086 Literary loan 2.00% 3/15/1999 2019 161,449 Literary loan 2.00% 6/15/1999 2019 422,680 Literary loan 2.00% 6/15/1999 2019 880,411 Literary loan 2.00% 11/15/2000 2021 493,789 Literary loan 3.00% 12/15/2000 2021 154,118 Literary loan 2.00% 7/1/2003 2023 250,000 Total Literary loans 2,990,863$ 5,277$ 5,277$
8,764 8,764
5,828 5,828
30,432 30,432
181,332 30,222
377,778 62,963
129,654 18,522
88,067 12,581
21,035 3,005
69,965 9,995
48,923 6,989
519,813 57,757
445,686 55,700
63,049 8,200
169,072 21,134
352,171 44,020
246,899 24,689
77,118 7,700
150,000 12,500
426,278$

Literary anticipation note 4.10% 9/4/2008 9/4/2013 992,638$ 992,638$ -$

Other Obligations: Capital Leases (Note 8) 357,060$ 251,700$
Landfill Closure and Postclosure Monitoring Liability 1,100,775 -
OPEB Obligation 7,153 -
Compensated Absences 522,126 391,595

Total Other Obligations 1,987,114$ 643,295$

Total Long-Term Obligations 20,999,322$ 1,899,645$

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government - Governmental Activity Indebtedness (continued)

Details of long-term indebtedness: (continued)

Final Amount of Balance Amount Interest Date Maturity Original »—=«Governmental_— Due Within Rates Issued Date Issue Activities One Year Literary loans: Literary loan 3.00% 12/18/1981 2012 $176,504 § 5277 $8217 Literary loan 3.00% 12/16/1981 2012 293,797 8,764 8,764 Literary loan 3.00% © 12/5/1981 2012 194,990, 5,828 5828 Literary loan 3.00% «© 12/15/1981 2012 1,019,500 30,432 30,432 Literary loan 3.00% 7/15/1986 2017 ‘960,000 181,332 30,222 Literary loan 3.00% 78/1986 2017 2,000,000 377,778 62,963 Literary loan 3.00% 24/1988 2018 530,999 129,654 18,522 Literary loan 3.00% 2/1/1988 «2018 358,151 88,067 12,581 Literary loan 3.00% 21/1988 2018 84,805 21,035 3,005, Literary loan 3.00% 2/1/1988 2018 281,079 69,965 9,995, Literary loan 3.00% 21/1988 «2018 196,873 48,923 6,989 Literary loan 200% 1/1/2000 ©2020 4,155,140 519,813 51,757 Literary loan 2.00% 35/1999 2019 1,114,086 445,686 55,700 Literary loan 200% 3/15/1999 2019 161,449 63,049 8,200 Literary loan 200% —@iisi999 2019 422,680 169,072 21,134 Literary loan 200% — @si1999 (2019 880,411 352,171 44,020 Literary loan 2.00% 11/18/2000 2021 493,789 246,899 24,689 Literary loan 3.00% 12/15/2000 2021 154,118 T1118 7,700 Literary loan 200% 7/1/2003 «(2028 250,000 450,000, 42,500 Total Literary loans 263_§ Literary anticipation note 440% 9/4/2008 9/4/2013 $992,638 _$ 992.638$ : Other Obligations: Capital Leases (Note 8) $ 367,080 $ 251,700 Landfill Closure and Postclosure Monitoring Liability 1,100,775 : OPEB Obligation 7,183, : Compensated Absences 522,126 391,595

Total Other Obligations

114 $643,205

Total Long-Term Obligations $20,999,322 § 1,699,645

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government – Enterprise Activity Indebtedness:

Annual requirements to amortize long-term debt and related interest are as follows:

Year Ending

June 30, Principal Interest

2012 18,602$ 32,845$

2013 19,371 32,076

2014 20,175 31,272

2015 21,015 30,432

2016 21,894 29,553

2017-2021 119,455 133,093

2022-2026 143,665 104,195

2027-2031 179,840 68,020

2032-2036 207,538 22,833

Totals $ 751,555 $ 484,319

Revenue Bonds

The following is a summary of long-term debt transactions of the Enterprise Fund for the year ended June 30, 2011.

Balance Balance

July 1, 2010 Issuances Retirements June 30, 2011

Revenue bonds $ 769,421 $ - $ (17,866) $ 751,555

Details of long-term indebtedness:

Revenue Bonds:

Final Amount of Balance Amount Interest Date Maturity Original Governmental Due Within Rates Issued Date Issue Activities One Year

Revenue bond 0.00% 3/24/1999 2019 37,500$ 14,063$ 1,875$
Revenue bond 4.50% 4/10/1996 2036 900,000 737,492 16,727

Total Revenue Bonds 751,555$ 18,602$

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Primary Government - Enterprise Activity Indebtedness:

Annual requirements to amortize long-term debt and related interest are as follows:

Year Ending Revenue Bonds June 30, Principal interest 2012 $ 18602 $= 32,845 2013 49,371 32,076 2014 20,175 31,272 2015 21,015 30,432 2016 21,894 29,553 2017-2021 119,455, 133,093, 2022-2026 143,665, 104,195, 2027-2031 179,840 68,020 2032-2036 207,538 22,833 Totals $ 751,555 § 484,319

The following is a summary of long-term debt transactions of the Enterprise Fund for the year ended June 30, 2011

Balance Balance July 1, 2010 Issuances Retirements _June 30, 2011 Revenue bonds $769,421 $ -$ (17,866) $ 751,555 Details of long-term indebtedness: Revenue Bonds: Final Amount of Balance ‘Amount Interest Date Maturity Original = Governmental Due Within Rates Issued Date Issue Activities One Year Revenue bond 0.00% —-3i24ri999 «2019 $= 37,500 $ 14063 $1,875 Revenue bond 4.50% 4/10/1996 (2036 900,000 737,492 16,727

Total Revenue Bonds

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Component Unit – School Board Indebtedness

The following is a summary of long-term debt transactions of the discretely presented component unit for the year ended June 30, 2011:

Balance Balance

July 1, 2010 Issuances Retirements June 30, 2011

OPEB obligation $ 34,000 $ 276,346 $ (261,969) $ 48,377

Early retirement incentive - 50,000 - 50,000

Compensated absences 1,030,578 672,864 (772,934) 930,508

Total $ 1,064,578 $ 999,210 $ (1,034,903) $ 1,028,885

Details of long-term indebtedness: Amount

Total Due Within Amount One Year

Other Obligations: Early retirement incentive 50,000$ 24,000$
OPEB Obligation 48,377 -
Compensated Absences 930,508 697,881

Total Other Obligations 1,028,885$ 721,881$

Note 8-Capital Leases:

Primary Government The County has entered into lease agreements to finance the acquisition of school buses and a bucket truck for the School Board. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their minimum lease payments at the date of inception.

The assets acquired through capital leases are as follows:

Machinery & Equipment

Machinery and equipment $ 853,644
Less: Accumulated depreciation (222,414)

Net Asset $ 631,230

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 7-Long-Term Debt: (continued)

Component Unit - School Board Indebtedness

The following is a summary of long-term debt transactions ofthe discretely presented component unt for the year ended

June 30, 2011 Balance Balance July 1, 2010 Issuances Retirements _June 30, 2011 OPEB obligation $s 34,000 $ 276,346 $ (261,969) $ 48,377 Early retirement incentive 50,000 - 50,000 Compensated absences 1,030,578 672,864 (772,934) 930,508 Total $1,064,578 $ 999,210 $ (1,034,903) $ 1,028,885 Details of long-term indebtedness: Amount Total Due Within Amount One Year Other Obligations: Early retirement incentive 8 50,000 § 24,000 OPEB Obigation 48,377 : Compensated Absences 930,508 697.881 Total Other Obligations $1,028,885 § 721,881

Note 8-Capital Leases:

Primary Government

The County has entered into lease agreements to finance the acquisition of school buses and a bucket truck for the School Board. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their minimum lease payments at the date of inception.

The assets acquired through capital leases are as follows:

Machinery & Equipment Machinery and equipment $853,644 Less: Accumulated depreciation (222,414) Net Asset $ 631,230

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 8-Capital Leases: (continued)

The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2011, were as follows:

Year Ending Capital June 30, Leases

2012 $ 264,010
2013 108,527

Subtotal $ 372,537
Less, amount

representing interest (15,477)

Present Value of Lease Agreement $ 357,060

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 8-Capital Leases: (continued)

The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2011, were as follows:

Year Ending Capital June 30, Leases 2012 $ 264,010 2013 108,527 Subtotal $ 372,537 Less, amount representing interest (15,477)

Present Value of Lease Agreement $ 367,060

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans:

A. Plan Description

Name of Plan: Virginia Retirement System (VRS) Identification of Plan: Agent and Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Administering Entity: Virginia Retirement System (System)

All full-time, salaried permanent (professional) employees of public school divisions and employees of participating employers are automatically covered by VRS upon employment. Benefits vest after five years of service credit. Members earn one month of service credit for each month they are employed and their employer is paying into the VRS. Members are eligible to purchase prior public service, active duty military service, certain periods of leave, and previously refunded VRS service as credit in their plan.

VRS administers two defined benefit plans for local government employees – Plan 1 and Plan 2:

 Members hired before July 1, 2010 and who have service credits before July 1, 2010 are covered under Plan 1. Non-hazardous duty members are eligible for an unreduced retirement benefit beginning at age 65 with at least five years of service credit or age 50 with at least 30 years of service credit. They may retire with a reduced benefit early at age 55 with at least 10 years of service credit or age 50 with at least five years of service credit.

 Members hired or rehired on or after July 1, 2010 and who have no service credits before July 1, 2010 are covered under Plan 2. Non-hazardous duty members are eligible for an unreduced benefit beginning at their normal Social Security retirement age with at least five years of service credit or when the sum of their age and service equals 90. They may retire with a reduced benefit as early as age 60 with at least five years of service credit.

 Eligible hazardous duty members in Plan 1 and Plan 2 are eligible for an unreduced benefit beginning at age 60 with at least 5 years of service credit or age 50 with at least 25 years of service credit. These members include sheriffs, deputy sheriffs and hazardous duty employees of political subdivisions that have elected to provide enhanced coverage for hazardous duty service. They may retire with a reduced benefit as early as age 50 with at least five years of service credit. All other provisions of the member’s plan apply.

The VRS Basic Benefit is a lifetime monthly benefit based on a retirement multiplier as a percentage of the member’s average final compensation multiplied by the member’s total service credit. Under Plan 1, average final compensation is the average of the member’s 36 consecutive months of highest compensation. Under Plan 2, average final compensation is the average of the member’s 60 consecutive months of highest compensation. The retirement multiplier for non-hazardous duty members is 1.70 %. The retirement multiplier for sheriffs and regional jail superintendents is 1.85%. The retirement multiplier for eligible political subdivision hazardous duty employees other than sheriffs and jail superintendents is 1.70% or 1.85% as elected by the employer. At retirement, members can elect the Basic Benefit, the Survivor Option, a Partial Lump-Sum Option Payment (PLOP) or the Advance Pension Option. A retirement reduction factor is applied to the Basic Benefit amount for members electing the Survivor Option, PLOP or Advance Pension Option or those retiring with a reduced benefit.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans:

Plan Description

Name of Plan: Virginia Retirement System (VRS) Identification of Plan: Agent and Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Administering Entity: Virginia Retirement System (System)

Al fulltime, salaried permanent (professional) employees of public school divisions and employees of participating employers are automatically covered by VRS upon employment. Benefits vest after five years of service credit. Members ear one month of service credit for each month they are employed and their ‘employer is paying into the VRS. Members are eligible to purchase prior public service, active duty military service, certain periods of leave, and previously refunded VRS service as credit in their plan.

VRS administers two defined benefit plans for local government employees ~ Plan 1 and Plan 2:

© Members hired before July 1, 2010 and who have service credits before July 1, 2010 are covered under Plan 1. Non-hazardous duty members are eligible for an unreduced retirement benefit beginning at age 65 with at least five years of service credit or age 50 with at least 30 years of service credit. They may retire with a reduced benefit early at age 55 with at least 10 years of service credit or age 50 with at least five years of service credit.

© Members hired or rehired on or after July 1, 2010 and who have no service credits before July 1, 2010 are covered under Plan 2. Non-hazardous duty members are eligible for an unreduced benefit beginning at their normal Social Security retirement age with at least five years of service credit or when the sum of their age and service equals 90. They may retire with a reduced benefit as early as age 60 with at least five years of service credit.

© Eligible hazardous duty members in Plan ‘1 and Plan 2 are eligible for an unreduced benefit beginning at age 60 with at least 5 years of service credit or age 50 with atleast 25 years of service credit. These members include sheriffs, deputy sherifs and hazardous duty employees of political subdivisions that have elected to provide enhanced coverage for hazardous duty service. They may retire with a reduced benefit as early as age 50 with at least five years of service credit. All other provisions of the member’s plan apply.

The VRS Basic Benefit isa lifetime monthly benefit based on a retirement multiplier as a percentage of the member’s average final compensation multiplied by the member’s total service credit. Under Plan 1, average final compensation is the average of the member’s 36 consecutive months of highest compensation. Under Plan 2, average final compensation is the average of the member’s 60 consecutive months of highest compensation. The retirement multiplier for non-hazardous duty members is 1.70%. The retirement multiplier for sheriffs and regional jal superintendents is 1.85%. The retirement multiplier for eligible political subdivision hazardous duty employees other than sheriffs and jail superintendents is 1.70% or 1.85% as elected by the employer. Atretirement, members can elect the Basic Benefit, the Survivor Option, a Partial Lump-Sum Option Payment (PLOP) or the Advance Pension Option. A retirement reduction factor is applied to the Basic Benefit amount for members electing the Survivor Option, PLOP or Advance Pension Option or those retiring with a reduced benefit.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

A. Plan Description (continued)

Retirees are eligible for an annual cost-of-living adjustment (COLA) effective July 1 of the second calendar year of retirement. Under Plan 1, the COLA cannot exceed 5.00%; under Plan 2, the COLA cannot exceed 6.00%. During years of no inflation or deflation, the COLA is 0.00%. The VRS also provides death and disability benefits. Title 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia.

The system issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for VRS. A copy of the report may be obtained from the VRS Web site at http://www.varetire.org/Pdf/Publications/2010-annual-report.pdf or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

B. Funding Policy

Primary Government: Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of their compensation toward their retirement. All or part of the 5.00% member contribution may be assumed by the employer. In addition, the County of Russell, Virginia is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the Code of Virginia and approved by the VRS Board of Trustees. The County of Russell, Virginia’s contribution rate for the fiscal year ended 2011 was 10.52% of annual covered payroll.

Discretely Presented Component Unit - School Board (Non-Professional Employees): Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of their compensation toward their retirement. All or part of the 5.00% member contribution may be assumed by the employer. In addition, the School Board is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the Code of Virginia and approved by the VRS Board of Trustees. The School Board’s contribution rate for the fiscal year ended 2011 was 14.07% of annual covered payroll.

C. Annual Pension Cost

For fiscal year 2011, the County of Russell, Virginia’s annual pension cost of $579,314 and $384,524 was equal to the County of Russell, Virginia’s required and actual contributions for the County and the School Board Non- Professionals, respectively.

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-48-

‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

Plan Description (continued)

Retirees are eligible for an annual cost-ofiving adjustment (COLA) effective July 1 of the second calendar year of retirement. Under Plan 1, the COLA cannot exceed 5.00%; under Plan 2, the COLA cannot exceed 6.00%. During years of no inflation or deflation, the COLA is 0,00%. The VRS also provides death and disability benefits. Tile 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virgina,

The system issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for VRS. A copy of the report may be obtained from the VRS Web site at htto:/wwwvaretire.org/PdfiPublications/2010-annual-report.pdf or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500,

Funding Policy

Primary Government: Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of

their compensation toward their retirement. All or part ofthe 5.00% member contribution may be assumed by the employer. In addition, the County of Russell, Virginia is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the Code of Virginia and approved by the VRS Board of Trustees. The County of Russell, Virginia’s contribution rate forthe fiscal year ended 2011 was 10.52% of annual covered payrol

Discretely Presented Component Unit - School Board (Non-Professional Employees):

Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of their compensation toward their retirement. All or part ofthe 5.00% member contribution may be assumed by the employer. In addition, the School Board is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the Code of Virainia and approved by the VRS Board of Trustees. The School Board’s contribution rate for the fiscal year ended 2011 was 14.07% of annual covered payroll

Annual Pension Cost

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

C. Annual Pension Cost (continued)

Three-Year Trend Information

Fiscal Annual Percentage Net

Year Pension of APC Pension

Ending Cost (APC) 1 Contributed Obligation

Primary Government:

County 6/30/2009 432,914$ 100.00% -$

6/30/2010 437,791 100.00% -

6/30/2011 579,314 100.00% -

Discretely Presented-Component Unit:

School Board Non-Professional 6/30/2009 422,641$ 100.00% -$

6/30/2010 412,281 100.00% -

6/30/2011 384,524 100.00% -

1 Employer portion only

Primary Government:
The FY2011 required contribution was determined as part of the June 30, 2009 actuarial valuation using the entry age actuarial cost method. The actuarial assumptions at June 30, 2009 included (a) an investment rate of return (net of administrative expenses) of 7.50%, (b) projected salary increases ranging from 3.75% to 5.60% per year for general government employees and 3.50% to 4.75% for employees eligible for enhanced benefits available to law enforcement officers, firefighters, and sheriffs, and © a cost-of-living adjustment of 2.50% per year. Both the investment rate of return and the projected salary increases include an inflation component of 2.50%. The actuarial value of the County’s assets is equal to the modified market value of assets. This method uses techniques that smooth the effects of short-term volatility in the market value of assets over a five-year period. The County’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2009 was 20 years.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

C. Annual Pension Cost (continued)

Three-Year Trend Information

Fiscal Annual Percentage Net Year Pension of APC Pension Ending Cost (APC) ’ Contributed Obligation Primary Government: County ers009 $432,914 100.00% $ 6/30/2010 437,791 100.00% 6/30/2011 579,314 100.0% Discretely Presented-Component Unit: ‘School Board Non-Professional es0’009 $422,641 100.00% $ 6/30/2010 412,281 100.00% 6/30/2011 384,524 100.00%

‘Employer portion only

Primary Government:

The FY2011 required contribution was determined as part of the June 30, 2009 actuarial valuation using the entry age actuarial cost method. The actuarial assumptions at June 30, 2009 included (a) an investment rate of retum (net of administrative expenses) of 7.50%, (b) projected salary increases ranging from 3.75% to 5.60% per year for general government employees and 3.50% to 4.75% for employees eligible for enhanced benefits available to law enforcement officers, firefighters, and sheriffs, and © a cost-of-living adjustment of 2.50% per year. Both the investment rate of return and the projected salary increases include an inflation component of 2.50%. The actuarial value of the County’s assets is equal to the modified market value of assets. This method uses techniques that smooth the effects of short-term volatility in the market value of assets over a five-year period. The County’s unfunded actuarial accrued lability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2009 was 20 years.

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-49-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

C. Annual Pension Cost (continued)

Discretely Presented-Component Unit School Board - Non-Professional: The FY2011 required contribution was determined as part of the June 30, 2009 actuarial valuation using the entry age actuarial cost method. The actuarial assumptions at June 30, 2009 included (a) an investment rate of return (net of administrative expenses) of 7.50%, (b) projected salary increases ranging from 3.75% to 5.60% per year for general government employees and 3.50% to 4.75% for employees eligible for enhanced benefits available to law enforcement officers, firefighters, and sheriffs, and © a cost-of-living adjustment of 2.50% per year. Both the investment rate of return and the projected salary increases include an inflation component of 2.50%. The actuarial value of the School Board’s assets is equal to the modified market value of assets. This method uses techniques that smooth the effects of short-term volatility in the market value of assets over a five- year period. The School Board’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2009 was 20 years.

D. Funded Status and Funding Progress

Primary Government: As of June 30, 2010, the most recent actuarial valuation date, the plan was 75.36% funded. The actuarial accrued liability for benefits was $26,221,057, and the actuarial value of assets was $19,759,376, resulting in an unfunded actuarial accrued liability (UAAL) of $6,461,681. The covered payroll (annual payroll of active employees covered by the plan) was $5,581,443, and ratio of the UAAL to the covered payroll was 115.77%.

Discretely Presented Component Unit - School Board (Non-Professional Employees): As of June 30, 2010, the most recent actuarial valuation date, the plan was 65.51% funded. The actuarial accrued liability for benefits was $15,863,210, and the actuarial value of assets was $10,392,200, resulting in an unfunded actuarial accrued liability (UAAL) of $5,471,010. The covered payroll (annual payroll of active employees covered by the plan) was $2,838,654, and ratio of the UAAL to the covered payroll was 192.73%.

The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability (AAL) for benefits.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

Annual Pension Cost (continued)

Discretely Presented-Component Unit School Board - Non-Professional:

The FY2011 required contribution was determined as part of the June 30, 2009 actuarial valuation using the entry age actuarial cost method. The actuarial assumptions at June 30, 2009 included (a) an investment rate of return (net of administrative expenses) of 7.50%, (b) projected salary increases ranging from 3.75% to 5.60% per year for general government employees and 3.50% to 4.75% for employees eligible for enhanced benefits available to law enforcement officers, firefighters, and sheriffs, and © a cost-of-living adjustment of 2.50% per year. Both the investment rate of return and the projected salary increases include an inflation component of 2.50%. The actuarial value of the School Board’s assets is equal to the modified market value of assets. This, method uses techniques that smooth the effects of short-term volailtyn the market value of assets over afive- year period. The School Board’s unfunded actuarial acerued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2009 was 20 years.

Funded Status and Funding Progress

Primary Government: As of June 30, 2010, the most recent actuarial valuation date, the plan was 75.36% funded. The actuarial

accrued liability for benefits was $26,221,057, and the actuarial value of assets was $19,759,376, resulting in an unfunded actuarial accrued liability (UAAL) of $6,461,681. The covered payroll (annual payroll of active employees covered by the plan) was $5,581,443, and ratio of the UAAL to the covered payroll was 115.77%.

Discretely Presented Component Unit - Schoo! Board (Non-Professional Employees):

As of June 30, 2010, the most recent actuarial valuation date, the plan was 65.51% funded. The actuarial accrued liability for benefits was $15,863,210, and the actuarial value of assets was $10,392,200, resulting in an unfunded actuarial accrued liability (UAAL) of $5,471,010. The covered payroll (annual payroll of active employees covered by the plan) was $2,838,654, and ratio of the UAAL to the covered payroll was 192.73%.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

E. Discretely Presented Component Unit School Board

Professional Employees:

Plan Description

The Russell County School Board contributes to the Virginia Retirement System (VRS), a cost-sharing multiple- employer defined benefit pension plan administered by the Virginia Retirement System. VRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Title 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia. The system issues a publicly available comprehensive annual financial report that includes financial report that includes financial statements and required supplementary information for VRS. A copy of the report may be obtained from the VRS Web site at http://www.varetire.org/Pdf/Publications/2010-annual-report.pdf or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Funding Policy Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of their compensation toward their retirement. All or part of the 5.00% member contribution may be assumed by the employer. In addition, the School Board is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the statute and approved by the VRS Board of Trustees. The School Board’s contribution to the statewide cost sharing pool for professional employees was $700,575, $1,202,914, and $1,766,705 for the fiscal years ended 2011, 2010, and 2009, respectively.
Employer contributions represented 3.93%, 8.81%, and 8.81% of covered payroll for the fiscal years ended 2011, 2010, and 2009, respectively.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 9-Employee Retirement System and Pension Plans: (continued)

Discretely Presented Component Unit School Board

Professional Employees:

Plan Description The Russell County School Board contributes tothe Virginia Retirement System (VRS), a cost-sharing multiple-

employer defined benefit pension plan administered by the Virginia Retirement System. VRS provides retirement and disability benefits, annual cost-oflving adjustments, and death benefits to plan members and beneficiaries. Title 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia. The system issues a publicly available comprehensive annual financial report that includes financial report that includes financial statements and required supplementary information for VRS. A copy of the report may be obtained from the VRS Web site at hittp:/ww. varetire.org/Paf/Publications/2010-annual-report.paf or by writing to the Systems Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500,

Funding Policy Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of

their compensation toward their retirement. All or part ofthe 5.00% member contribution may be assumed by the employer. In addition, the School Board is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the statute and approved by the VRS Board of Trustees. The School Board’s contribution to the statewide cost sharing pool for professional employees was $700,575, $1,202,914, and $1,766,705 for the fiscal years ended 2011, 2010, and 2009, respectively Employer contributions represented 3.93%, 8.81%, and 8.81% of covered payroll forthe fiscal years ended 2011, 2010, and 2009, respectively.

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Sle

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 10-Capital Assets:

Capital asset activity for the year ended June 30, 2011 was as follows:

Primary Government:

Beginning Ending

Balance Increases Decreases Balance

Governmental Activities:

Capital assets, not being depreciated:

Land $ 1,541,333 $ - $ - $ 1,541,333

Construction in progress 2,445,645 622,652 (1,573,847) 1,494,450

Total capital assets not being depreciated $ 3,986,978 $ 622,652 $ (1,573,847) $ 3,035,783

Capital assets, being depreciated:

Buildings and improvements $ 26,775,666 $ 1,633,847 $ - $ 28,409,513

Machinery and equipment 3,783,064 235,696 (479,172) 3,539,588

Total capital assets being depreciated $ 30,558,730 $ 1,869,543 $ (479,172) $ 31,949,101

Less: accumulated depreciation for:

Buildings and improvements $ (11,363,217) $ (655,809) $ - $ (12,019,026)

Machinery and equipment (2,255,478) (504,015) 400,696 (2,358,797)

Total accumulated depreciation $ (13,618,695) $ (1,159,824) $ 400,696 $ (14,377,823)

Total capital assets being depreciated, net $ 16,940,035 $ 709,719 $ (78,476) $ 17,571,278

Governmental activities capital assets, net $ 20,927,013 $ 1,332,371 $ (1,652,323) $ 20,607,061

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 10-Capital Assets:

Capital asset activity for the year ended June 30, 2011 was as follows

Primary Government: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital assets, not being depreciated: Land $1,541,333. § -$ = $1,541,333 Construction in progress 2,445,645 622,652 (1,573,847) 1,494,450 Total capital assets not being depreciated $—«3,986,978 $ 622,652 $ (1,573,847) $ 3,035,783 Capital assets, being depreciated: Buildings and improvements $ 26,775,666 § 1,633,847 $ - $28,409,513 Machinery and equipment 3,783,064 235,696 (479,172) _ 3,539,588 Total capital assets being depreciated $30,558 730 $1,809,543 § (479,172) $31,949,101 Less: accumulated depreciation for: Buildings and improvements $ (11,363,217) $ (655,809) $ - $ (12,019,026) Machinery and equipment (2,255,478) (504,015) 400,696 (2,358,797) Total accumulated depreciation $_ (13,618,695) $___ (1,159,824) $ 400,696 $_ (14,377,823) Total capital assets being depreciated, net -«$—*16,940,035.$ 709,719 $ (78,476) $ 17,571,278

Governmental activities capital assets, net $20,927,013 $ 1,332,371 $ (1,652,323) $__ 20,607,061

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 10-Capital Assets: (continued)

Primary Government: (continued)

Beginning Ending

Balance Increases Decreases Balance

Business-Type Activities

Capital assets, being depreciated:

Utility plant $ 5,240,699 $ - $ - $ 5,240,699

Machinery and equipment 75,470 - - 75,470

Total capital assets being depreciated $ 5,316,169 $ - $ - $ 5,316,169

Less: accumulated depreciation for:

Utility plant $ (1,593,038) $ (131,017) $ - $ (1,724,055)

Machinery and equipment (75,470) - - (75,470)

Total accumulated depreciation $ (1,668,508) $ (131,017) $ - $ (1,799,525)

Total capital assets being depreciated, net $ 3,647,661 $ (131,017) $ - $ 3,516,644

Business-Type activities capital assets, net $ 3,647,661 $ (131,017) $ - $ 3,516,644

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities:

General government administration $ 14,878

Judicial administration 6,016

Public safety 193,741

Public works 49,978

Health and welfare 40,958

Education 811,839

Parks, recreation, and cultural 34,600

Community development 7,814

Total depreciation expense-governmental activities $ 1,159,824

Business-Type activities: Sewer Authority $ 131,017

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 10-Capital Assets: (continued)

Primary Government: (continued)

Beginning Ending Balance Increases Decreases Balance Business-Type Activities Capital assets, being depreciated: Utility plant $ 5,240,699 § -$ - $5,240,699 Machinery and equipment 75,470 : : 75,470 Total capital assets being depreciated $5,316,169 § a) = $__ 5,316,169 Less: accumulated depreciation for: Utility plant $ (1,593,038) § (134,017) § = $ (1,724,055) Machinery and equipment (75,470) : : (75,470) Total accumulated depreciation $ (7,668,508) $—(131,077) $ = $ (4,799,525) Total capital assets being depreciated, net «$3,647,661 $ (131,017) $ ~$ 3,516,644 Business-Type activities capital assets, net $3,647,661 $—_—(134,017) $ = $ 3,516,644

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities: General government administration Judicial administration Public safety Public works Health and welfare Education Parks, recreation, and cultural Community development

Total depreciation expense-governmental activities

Business-Type activites: Sewer Authority

14,878 6,016 193,741 49,978 40,958 811,839 34,600 7.814

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 10-Capital Assets: (continued)

Capital asset activity for the School Board for the year ended June 30, 2011 was as follows:

Discretely Presented Component Unit – School Board:

Beginning Ending

Balance Increases Decreases Balance

Capital assets, not being depreciated:

Land $ 4,643,707 $ - $ - $ 4,643,707

Construction in progress 90,571 - - 90,571

Total capital assets not being depreciated $ 4,734,278 $ - $ - $ 4,734,278

Capital assets, being depreciated:

Buildings and improvements $ 18,713,922 $ - $ - $ 18,713,922

Machinery and equipment 5,206,824 526,414 (17,467) 5,715,771

Total capital assets being depreciated $ 23,920,746 $ 526,414 $ (17,467) $ 24,429,693

Less: accumulated depreciation for:

Buildings and improvements $ (7,393,022) $ (444,310) $ - $ (7,837,332)

Machinery and equipment (3,453,568) (521,182) - (3,974,750)

Total accumulated depreciation $ (10,846,590) $ (965,492) $ - $ (11,812,082)

Total capital assets being depreciated, net $ 13,074,156 $ (439,078) $ (17,467) $ 12,617,611

Governmental activities capital assets, net $ 17,808,434 $ (439,078) $ (17,467) $ 17,351,889

Note 11-Risk Management:

The County and its Component Unit – School Board are exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The County and the related Component Unit – School Board participate with other localities in a public entity risk pool for their coverage of general liability, property, crime and auto insurance with the Virginia Association of Counties Risk Pool. Each member of this risk pool jointly and severally agrees to assume, pay and discharge any liability. The County and the School Board pay the Risk Pool contributions and assessments based upon classification and rates into a designated cash reserve fund out of which expenses of the pool, claims and awards are to be paid. In the event of a loss, deficit, or depletion of all available excess insurance, the pool may assess all members in the proportion to which the premium of each bears to the total premiums of all members in the year in which such deficit occurs. The County and its Component Unit – School Board continue to carry commercial insurance for all other risks of loss. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2011

Note 10-Capital Assets: (continued)

Capital asset activity for the School Board for the year ended June 30, 2011 was as follows:

Discretely Presented Component Unit - School Board:

Capital assets, not being depreciated: Land

Construction in progress Total capital assets not being depreciated

Capital assets, being depreciated: Buildings and improvements Machinery and equipment

Total capital assets being depreciated

Less: accumulated depreciation for: Buildings and improvements Machinery and equipment

Total accumulated depreciation

Total capital assets being depreciated, net

Governmental activities capital assets, net

Note sk Management:

Beginning Ending Balance Increases Decreases Balance 4,643,707 $ $4,643,707 90,571 90,571 4,734,278 § 8 4734,278 18,713,922 § : - $ 18,713,922 5,206,824 526,414 (17,467) 5718771 23920746 $526,414 (7.467) $_ 24,420,693 (7,393,022) § (444,310) $ (7,837,332) (3,453,568) (621,182) (3,974,750) (10,846,590) $__ (065,492) $(11,812,082) 13,074,156 $§ (439,078) (17.467) $ 12647611 17,808,434 $ (439,078) (17,467) $_17,951,889

The County and its Component Unit ~ School Board are exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The County and the related Component Unit - School Board participate with other localities in a public entity risk pool for their coverage of general liability, property, crime and auto insurance with the Virginia Association of Counties Risk Pool. Each member of this risk pool jointly and severally agrees to assume, pay and discharge any liability. The County and the School Board pay the Risk Pool contributions and assessments based upon classification and rates into a designated cash reserve fund ‘out of which expenses of the pool, claims and awards are to be paid. In the event of a loss, deficit, or depletion of all available excess insurance, the pool may assess all members in the proportion to which the premium of each bears to the total premiums of all members in the year in which such deficit occurs. The County and its Component Unit ~ Schoo! Board continue to carry commercial insurance for al other risks floss. Settled claims resulting from these risks

have not exceeded commercial insurance coverage in any of the past three fiscal years.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 12-Contingent Liabilities:

Federal programs in which the County and its component units participate were audited in accordance with the provisions of U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non- Profit Organizations. Pursuant to the provisions of this circular all major programs and certain other programs were tested for compliance with applicable grant requirements. While matters of noncompliance were disclosed by the audit, the Federal Government may subject grant programs to additional compliance tests, which may result in disallowed expenditures. In the opinion of management, any future disallowances of current grant program expenditures, if any, would be immaterial.

Note 13-Surety Bonds:

Fidelity & Deposit Company of Maryland-Surety: Ann McReynolds, Clerk of the Circuit Court 1,010,000$
Patrick Thompson, Treasurer 400,000
Randy N. Williams, Commissioner of the Revenue 3,000
Steve Dye, Sheriff 30,000
All constitutional officers’ employees: blanket bond 50,000

Hartford Company - Surety: Tammy Caldwell - Clerk of the School Board 10,000$
All school employees: blanket bond 10,000

USF&G Insurance Co. - Surety: All Social Services employees-blanket bond 100,000$

Note 14-Landfill Closure and Postclosure Care Cost:

State and federal laws and regulations require the County to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site after closure. $1,100,775 is the total estimated closure and postclosure care liability at June 30, 2011. This represents the cumulative amount based on the use of 100% of the estimated capacity of the landfill and is based on what it would cost to perform all remaining closure and postclosure in 2011. Actual costs for closure and postclosure monitoring may change due to inflation, deflation, changes in technology or changes in regulations. The County uses the Commonwealth of Virginia’s financial assurance mechanism to meet the Department of Environmental Quality’s assurance requirements for landfill closure and postclosure costs.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 12-Contingent Liabilities:

Note 13-Surety Bonds:

Fidelity & Deposit Company of Maryland-Surety:

‘Ann McReynolds, Clerk of the Circuit Court $ 1,010,000 Patrick Thompson, Treasurer 400,000 Randy N. Williams, Commissioner of the Revenue 3,000 Steve Dye, Sheriff 30,000 All constitutional officers’ employees: blanket bond 50,000

Hartford Company - Surety: Tammy Caldwell - Clerk of the School Board $ 10,000 All school employees: blanket bond 10,000

USF&G Insurance Co. - Surety All Social Services employees-blanket bond $ 100,000

Note 14-Landfill Closure and Postclosure Care Cost:

State and federal laws and regulations require the County to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site after closure. $1,100,775 is the total estimated closure and postelosure care liability at June 30, 2011. This represents the cumulative amount based on the use of 100% of the estimated capacity of the landfill and is based on what it would cost to perform all remaining closure and postelosure in 2011. Actual costs for closure and postclosure monitoring may change due to inflation, deftation, changes in technology or changes in regulations. The County uses the Commonwealth of Virginia’s financial assurance mechanism to meet the Department of Environmental Quality’s assurance requirements for landfill closure and postclosure costs.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 15-Deferred (Unearned) Revenue:

Governmental funds report deferred revenue in connection with receivables for revenues not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Unavailable Unearned

Delinquent property taxes receivable $ 6,903,497 $ 4,305,889

Prepaid taxes 81,455 81,455

Total deferred/unearned revenue for governmental funds $ 6,984,952 $ 4,387,344

Note 16-Self Health Insurance:

The County of Russell, Virginia established a limited risk management program for health insurance. Premiums are paid into the health plan fund from the County and School Board and are available to pay claims, and administrative costs of the program. During the fiscal year 2011, a total of $5,662,475 was paid in benefits and administrative costs.
The risk assumed by the County and School Board is based on the number of participants in the program. The risk varies by the number of participants and their specific plan type. As of June 30, 2011, the County and School Board were exposed to risk which represents the difference between the claims to date and the ceiling liability as calculated based on enrollment levels and health plan coverage. Additional costs in excess of the ceiling liability are covered as part of the contract with the County. Incurred but not reported claims of $339,622 have been accrued as a liability based primarily on actual cost incurred prior to June 30 but paid after year-end. Interfund premiums are based primarily upon the insured funds’ claims experience and are reported as quasi-external interfund transactions. Changes in the claims liability during fiscal year 2011 were as follows:

Current Year

Balance at Claims and Balance at

Beginning of Changes in Claim End of

Fiscal Year Fiscal Year Estimates Payments Fiscal Year

2010-11 $ 382,401 $ 5,619,696 $ (5,662,475) $ 339,622

Note 17-Commitments and Contingencies:

The School Board has obligated funds for the projects described below as of June 30, 2011:

Original Amount Paid Remaining Accounts Retainage

Contract As of 6/30/2011 Contract Amount Payable Payable

Honaker Library Renovations 114,335$ 15,000$ 99,335$ 30,000$ -$

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 15-Deferred (Unearned) Revenue:

Governmental funds report deferred revenue in connection with receivables for revenues not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, butnot yet eamed. At the end of the current fiscal year, the various components of deferred revenue and uneamed revenue reported in the governmental funds were as follows:

Unavailable Uneamed Delinquent property taxes receivable $ 6,903,497 $ 4,305,889 Prepaid taxes 81,455 81,455

Total deferred/uneamed revenue for governmental funds $ 6,984,952 $ 4,387,344 Note 16-Self Health Insurance:

The County of Russell, Virginia established a limited risk management program for health insurance. Premiums are paid into the health plan fund from the County and School Board and are available to pay claims, and administrative costs of the program. During the fiscal year 2011, a total of $5,662,475 was paid in benefits and administrative costs. The risk assumed by the County and School Board is based on the number of participants in the program. The risk varies by the number of participants and their specific plan type. As of June 30, 2011, the County and Schoo! Board were exposed to risk which represents the difference between the claims to date and the ceiling liability as calculated based on enrollment levels and health plan coverage. Additional costs in excess of the ceiling liability are covered as part ofthe contract with the County. Incurred but not reported claims of $339,622 have been accrued as a liability based primarily on actual cost incurred prior to June 30 but paid after year-end. Interfund premiums are based primarily upon the insured funds’ claims experience and are reported as quasi-external interfund transactions. Changes in the claims liability during fiscal year 2011 were as follows:

Current Year Balance at Claims and Balance at Beginning of Changes in Claim End of

Fiscal Year _ Fiscal Year_ _Estimates Payments _Fiscal Year

2010-11 $ 382,401 $ 5,619,696 $ (5,662,475) $ 339,622

Note 17-Commitments and Contingencies:

The School Board has obligated funds for the projects described below as of June 30, 2011

Original == Amount Paid Remaining Accounts _-Retainage Contract__As of 6/30/2011 Contract Amount __ Payable Payable Honaker Library Renovations $114,335 -§ 15,000 § 99,335 § 30,000 $ :

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 17-Commitments and Contingencies: (continued)

The Board of Supervisors has provided a moral obligation on many of the component unit Russell County Industrial Development Authority loans and bonds. During fiscal year 2011, the County paid $1,058,677 towards the Authority’s outstanding debt.

Note 18-Other Post-Employment Benefits-Health Insurance:

A. Plan Description

The County of Russell and Russell County’s Component Unit – School Board administer a single-employer healthcare plan (“the Plan”). The Plan provides for participation by eligible retirees and their dependents in the health insurance programs available to County and School Board employees. The Plan will provide retiring employees the option to continue health insurance offered by the County and School Board. Any County or School Board eligible retiree may receive this benefit until he/she has reached sixty five years of age.

To be eligible for this benefit a retiree must meet the following criteria: attained age 50 and 15 years of service and not eligible for Medicare and the last 10 years must be with the County or School Board prior to retirement. The benefits, employee contributions and the employer contributions are governed by the Board of Supervisors and the School Board and can be amended through the Board of Supervisors and the School Board action respectively. The Plan does not issue a publicly available financial report.

B. Funding Policy

The County and School Board currently pay for the post-retirement health care benefits on a pay-as-you-go basis. The County and School Board currently have 496 employees that are eligible, respectively, for the program. In addition, 100 percent of premiums are the responsibility of the retiree.

Health benefits include Medical, Dental, and Vision coverage for retirees and eligible spouses/dependents. Retirees are eligible to choose one of the following medical options through the County and School Board. The rates are as follows:

Retiree Spouse

Under 65 8,600$ 8,600$

Retiree Family

Under 65 5,880$ 13,842$

Medical & Rx

COBRA

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 17-Commitments and Contingencies: (continued)

Note 18-Other Post-Employment Benefits-Health Insurance:

A. Plan Description

The County of Russell and Russell County’s Component Unit- School Board administer a single-employer healthcare plan ("the Plan’). The Plan provides for participation by eligible retirees and their dependents in the health insurance programs available to County and School Board employees. The Plan will provide retiring employees the option to continue health insurance offered by the County and School Board. Any County or School Board eligible retiree may receive this benefit until he/she has reached sixty five years of age.

Tobe eligible for this benefit a retiree must meet the following criteria: attained age 50 and 15 years of service and not eligible for Medicare and the last 10 years must be with the County or School Board prior to retirement. The benefits, employee contributions and the employer contributions are governed by the Board of Supervisors and the School Board and can be amended through the Board of Supervisors and the School Board action respectively. The Plan does not issue a publicly available financial report.

B. Funding Policy

The County and School Board currently pay for the post-retirement health care benefits on a pay-as-you-go basis. The County and Schoo! Board currently have 496 employees that are eligible, respectively, for the program. In addition, 100 percent of premiums are the responsibilty of the retiree.

Medical & Rx Retiree Spouse Under 65 $ 8600 $ 8,600 COBRA Retiree Family Under 65 $5880 $ 13,842

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5T-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

C. Annual OPEB Cost and Net OPEB Obligation:

The County’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the County’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County’s net OPEB obligation:

Annual required contribution $ 42,468

Interest on net OPEB obligation 207

Adjustment to annual required contribution (302)

 Annual OPEB cost (expense) 42,373

Contributions made 40,169

 Increase in net OPEB obligation 2,204

Net OPEB obligation - beginning of year 4,949

Net OPEB obligation - end of year $ 7,153

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 and the two preceding years were as follows:

Percentage of

Fiscal Annual Annual OPEB Cost Net OPEB

Year Ended OPEB Cost Contributed Obligation

6/30/2009 $ 41,332 88.04% $ 4,945

6/30/2010 42,981 99.99% 4,949

6/30/2011 42,373 94.80% 7,153

The remainder of this page is left blank intentionally.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

C. Annual OPEB Cost and Net OPEB Obligation:

contributed to the plan, and changes in the County’s net OPEB obligation:

‘Annual required contribution Interest on net OPEB obligation

‘Adjustment to annual required contribution

Annual OPEB cost (expense) Contributions made

Increase in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB

obligation for 2011 and the two preceding years were as follows:

42,468 207 (302)

42,373 40,169

2,204 4,949

7,153

Percentage of Fiscal Annual Annual OPEB Cost Net OPEB Year Ended OPEB Cost Contributed Obligation 6/30/2009 $ 41,332 88.04% $ 4,945 6/30/2010 42,981 99.99% 4,949 6/30/2011 42,373 94.80% 7,153

The remainder ofthis page is left blank intentionally

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

C. Annual OPEB Cost and Net OPEB Obligation: (continued)

The School Board’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the School Board’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the School Board’s net OPEB obligation:

Annual required contribution $ 276,964

Interest on net OPEB obligation 1,350

Adjustment to annual required contribution (1,968)

 Annual OPEB cost (expense) 276,346

Contributions made 261,969

 Increase in net OPEB obligation 14,377

Net OPEB obligation - beginning of year 34,000

Net OPEB obligation - end of year $ 48,377

The School Board’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 and the two preceding years were as follows:

Percentage of

Fiscal Annual Annual OPEB Cost Net OPEB

Year Ended OPEB Cost Contributed Obligation

6/30/2009 $ 283,961 88.04% $ 33,972

6/30/2010 295,287 88.04% $ 34,000

6/30/2011 276,346 94.80% 48,377

D. Funded Status and Funding Progress

The funded status of the Plan for the County as of July 1, 2010, is as follows:

Actuarial accrued liability (AAL) $ 464,748

Actuarial value of plan assets $ -

Unfunded actuarial accrued liability (UAAL) $ 464,748

Funded ratio (actuarial value of plan assets / AAL) 0.00%

Covered payroll (active plan members) $ 5,581,443

UAAL as a percentage of covered payroll 8.33%

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

C. Annual OPEB Cost and Net OPEB Obligation: (continued)

amount actually contributed to the plan, and changes in the School Board’s net OPEB obligation:

‘Annual required contribution $ 276,964 Interest on net OPEB obligation 1,350 ‘Adjustment to annual required contribution (1,968)

Annual OPEB cost (expense) 276,346 Contributions made 261,969

Increase in net OPEB obligation 14377 Net OPEB obligation - beginning of year 34,000 Net OPEB obligation - end of year $48,377

The School Board’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB

obligation for 2011 and the two preceding years were as follows:

Percentage of Fiscal Annual Annual OPEB Cost Net OPEB YearEnded _ OPEBCost_ Contributed Obligation 6/30/2009 $283,961 88.04% $ 33,972 6/30/2010 295,287 88.04% § 34,000 6/3012011 276,346 94.80% 48,377 D. Funded Status and Funding Progress The funded status of the Plan for the County as of July 1, 2010, is as follows: Actuarial accrued liability (AL) $464,748 Actuarial value of plan assets $ - Unfunded actuarial accrued lability (UAAL) $464,748 Funded ratio (actuarial value of plan assets / AL) 0.00% Covered payroll (active plan members) $5,581,443 UAAL as a percentage of covered payroll 8.33%

59-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

D. Funded Status and Funding Progress (continued)

The funded status of the Plan for the School Board as of July 1, 2010, is as follows:

Actuarial accrued liability (AAL) $ 3,030,967

Actuarial value of plan assets $ -

Unfunded actuarial accrued liability (UAAL) $ 3,030,967

Funded ratio (actuarial value of plan assets / AAL) 0.00%

Covered payroll (active plan members) $ 20,559,274

UAAL as a percentage of covered payroll 14.74%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far in the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, will present multiyear trend information, as it becomes available, about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

E. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point.

The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the July 1, 2010, actuarial valuation, the projected unit of credit actuarial cost method was used. Under this method, future benefits are projected and the present value of such benefits is allocated from date of hire to date of eligibility the actuarial assumptions included: inflation at 2.50 percent, plus productivity component of 1.25 percent, investment rate of return at 4.00 percent, and a health care trend rate of 10.00 percent graded to 5.00 percent over 8 years. The UAAL is being amortized as a level percentage over the remaining amortization period, which at June 30, 2011 was 20 years.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 18-Other Post-Employment Benefits-Health Insurance: (continued)

D. Funded Status and Funding Progress (continued)

The funded status of the Plan for the School Board as of July 1, 2010, is as follows:

Actuarial accrued liability (AL) $ 3,030,967 Actuarial value of plan assets $ :

Unfunded actuarial accrued lability (UAAL) $ 3,030,967 Funded ratio (actuarial value of plan assets / AL) 0.00% Covered payroll (active plan members) $ 20,559,274 UAAL as a percentage of covered payroll 14.74%

The schedule of funding progress, presented as required supplementary information following the notes tothe financial ‘statements, will present multiyear trend information, as it becomes available, about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

E. Actuarial Methods and Assumptions

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit:

A. Plan Description

The County participates in the Health Insurance Credit Program, a plan designed to assist retirees with the cost of health insurance coverage. This program is an agent and cost sharing, multiple-employer defined benefit plan administered by the Virginia Retirement System (VRS). The Virginia General Assembly establishes the dollar amount of the health insurance credit for each year of creditable service. The credit amount and eligibility differs for state, school division, political subdivision, local officer, local social services department and general registrar retirees.

An employee of the County, who retires under VRS with at least 15 years of total creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $1.50 per year of creditable service up to a maximum monthly credit of $45. However, such credit shall not exceed the health insurance premium for the retiree. Disabled retirees automatically receive the maximum monthly health insurance credit of $45.

Benefit provisions and eligibility requirements are established by Title 51.1, Chapter 14 of the Code of Virginia. The VRS actuarially determines the amount necessary to fund all credits provided, reflects the cost of such credits in the applicable employer contribution rate pursuant to §51.1-145, and prescribes such terms and conditions as are necessary to carry out the provisions of the health insurance credit program. VRS issues separate financial statements as previously discussed in Note 9.

B. Funding Policy

As a participating local political subdivision, the County is required to contribute the entire amount necessary to fund participation in the program using the actuarial basis specified by the Code of Virginia and the VRS Board of Trustees. The County’s contribution rate for the fiscal year ended 2011 was 0.06% of annual covered payroll.

C. OPEB Cost and Net OPEB Obligation:

The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions, is based on the annual required contribution (ARC). The County is required to contribute the ARC, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The remainder of this page is left blank intentionally.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit:

A. Plan Description

The County participates in the Health Insurance Credit Program, a plan designed to assist retirees with the cost of health insurance coverage. This program is an agent and cost sharing, multiple-employer defined benefit plan administered by the Virginia Retirement System (VRS). The Virginia General Assembly establishes the dollar amount of the health insurance credit for each year of creditable service. The credit amount and eligibilty differs for state, school division, political subdivision, local officer, local social services department and general registrar retirees.

An employee of the County, who retires under VRS with atleast 15 years of total creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $1.50 per year of creditable service up to a maximum monthly credit of $45. However, such credit shall not exceed the health insurance premium for the retiree. Disabled retirees automatically receive the maximum monthly health insurance credit of $45.

B. Funding Policy

Asa participating local political subdivision, the County is required to contribute the entire amount necessary to fund participation in the program using the actuarial basis specified by the Code of Virginia and the VRS Board of Trustees. The County’s contribution rate forthe fiscal year ended 2011 was 0.06% of annual covered payroll

C. OPEB Cost and Net OPEB Obligation:

The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions, is based on the annual required contribution (ARC). The County is required to contribute the ARC, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, ifpaid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial abilities (or funding excess) over a period not to exceed thirty years.

The remainder of this page is left blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit: (continued)

C. OPEB Cost and Net OPEB Obligation: (continued)

For 2011, the County’s contribution of $3,304 was equal to the ARC and OPEB cost. The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011:

Fiscal Annual Percentage Net Year OPEB of ARC OPEB

Ending* Cost (ARC) Contributed Obligation Primary Government:

County 6/30/2010 $ 996 100.00% -$

6/30/2011 3,304 100.00% -

*only two years available

D. Funded Status and Funding Progress

The funded status of the plan as of June 30, 2010, the most recent actuarial valuation date, is as follows:

Actuarial accrued liability (AAL) $ 76,866

Actuarial value of plan assets $ 71,521

Unfunded actuarial accrued liability (UAAL) $ 5,345

Funded ratio (actuarial value of plan assets/AAL) 93.05%

Covered payroll (active plan members) $ 5,581,443

UAAL as a percentage of covered payroll 0.10%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future and reflect a long-term perspective. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations.

The remainder of this page is left blank intentionally.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit: (continued)

C. OPEB Cost and Net OPEB Obligation: (continued)

Fiscal Annual Percentage Net Year OPEB of ARC OPEB Ending Cost (ARC) Contributed Obligation Primary Government: County 6/30/2010 $ 996 100.0% $ 6/30/2011 3,304 100.00%

“only two years available

D. Funded Status and Funding Progress

The funded status of the plan as of June 30, 2010, the most recent actuarial valuation date, is as follows:

Actuarial accrued liability (AL) $ 76,866 Actuarial value of plan assets $ 71524

Unfunded actuarial accrued lability (UAL) $ 5,345 Funded ratio (actuarial value of plan assets/AAL) 93.05% Covered payroll (active plan members) $ 5,581,443 UAAL as a percentage of covered payroll 0.10%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future and reflect a long-term perspective. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status ofthe plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements presents mult-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations.

The remainder ofthis page is left blank intentionally.

62-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit: (continued)

E. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used included techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

The entry age normal cost method was used to determine the plan’s funding liabilities and costs. The actuarial assumptions included a 7.00% investment rate of return, compounded annually, including an inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAAL is being amortized as a level percentage of payroll on an open basis. The remaining open amortization period at June 30, 2009 was 26 years.

F. Professional Employees – Discretely Presented Component Unit School Board

The School Board participates in the Health Insurance Credit Program, a plan designed to assist retirees with the cost of health insurance coverage. This program is a cost sharing, multiple-employer defined benefit plan administered by the Virginia Retirement System (VRS). The Virginia General Assembly establishes the dollar amount of the health insurance credit for each year of creditable service.

A teacher, who retires under VRS with at least 15 years of total creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $4 per year of creditable service.
However, such credit shall not exceed the health insurance premium for the retiree. Disabled retirees automatically receive a monthly health insurance credit of $4 multiplied by the smaller of (i) twice the amount of their creditable service or (ii) the amount of creditable service they would have completed at age 60 if they had remained in service to that age.

The School Board is required to contribute, at an actuarially determined rate, the entire amount necessary to fund participation in the program. The current rate is 1.08% of annual covered payroll. The School Board’s contributions to VRS for the year ended June 30, 2011 was $165,875 and equaled the required contributions.

Note 20-Moral Obligations

The County has signed support agreements that back certain debt obligations of the Russell County Industrial Development Authority (a component unit of the County). In these agreements, the Board of Supervisors has a non- binding (moral obligation) to fund the Russell County Industrial Development Authority in amounts sufficient to cover debt service on referenced obligations. To date, the County of Russell, Virginia has provided funds sufficient to cover such debt service. As of June 30, 2011, the outstanding balance such loans was $7,834,623. During fiscal year 2011, the County paid $1,058,677 in debt service for the Russell County Industrial Development Authority.

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‘COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011

Note 19-Other Post-Employment Benefits-VRS Health Insurance Credit: (continued)

E. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point, The actuarial methods and assumptions used included techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations,

The entry age normal cost method was used to determine the plan’s funding liabilities and costs. The actuarial assumptions included a 7.00% investment rate of retum, compounded annually, including an inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAL is being amortized as a level percentage of payroll on an open basis. The remaining open amortization period at June 30, 2009 was 26 years.

F. Professional Employees — Discretely Presented Component Unit School Board

A teacher, who retires under VRS with atleast 15 years of total creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $4 per year of creditable service. However, such credit shall not exceed the health insurance premium for the retiree. Disabled retirees automatically receive a monthly health insurance credit of $4 multiplied by the smaller of (i) twice the amount of their creditable service or (i) the amount of creditable service they would have completed at age 60 if they had remained in service to that age.

Note 20-Moral Obligations

The County has signed support agreements that back certain debt obligations of the Russell County Industral Development Authority (a component unit of the County). In these agreements, the Board of Supervisors has a non- binding (moral obligation) to fund the Russell County Industrial Development Authority in amounts sufficient to cover debt service on referenced obligations. To date, the County of Russell, Virginia has provided funds sufficient to cover such debt service. As of June 30, 2011, the outstanding balance such loans was $7,834,623. During fiscal year 2011, the County paid $1,058,677 in debt service for the Russell County Industrial Development Authority.

63-

Required Supplementary Information

Exhibit 11

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES General property taxes 12,283,491$ 12,283,491$ 13,548,896$ 1,265,405$
Other local taxes 4,399,074 4,399,074 4,553,398 154,324
Permits, privilege fees, and regulatory licenses 34,313 34,313 22,834 (11,479)
Fines and forfeitures 1,000 1,000 1,206 206
Revenue from the use of money and property 76,812 76,812 58,402 (18,410)
Charges for services 247,817 247,817 240,951 (6,866)
Miscellaneous 150,200 150,200 177,669 27,469
Recovered costs 1,149,866 1,149,866 294,919 (854,947)
Intergovernmental revenues:

Commonwealth 8,669,547 8,669,547 8,677,512 7,965
Federal - - 2,454,979 2,454,979

Total revenues 27,012,120$ 27,012,120$ 30,030,766$ 3,018,646$

EXPENDITURES Current:

General government administration 1,939,882$ 1,939,882$ 1,712,850$ 227,032$
Judicial administration 2,048,976 2,048,976 2,106,641 (57,665)
Public safety 4,805,896 4,805,896 5,226,797 (420,901)
Public works 3,571,926 3,571,926 3,305,813 266,113
Health and welfare 5,329,104 5,329,104 6,523,318 (1,194,214)
Education 5,073,470 5,073,470 5,167,968 (94,498)
Parks, recreation, and cultural 450,299 450,299 556,723 (106,424)
Community development 1,097,202 1,097,202 2,311,048 (1,213,846)
Nondepartmental - - 103,820 (103,820)

Capital projects 786,963 786,963 1,540,233 (753,270)
Debt service:

Principal retirement 1,349,016 1,349,016 1,794,455 (445,439)
Interest and other fiscal charges 558,505 558,505 742,921 (184,416)

Total expenditures 27,011,239$ 27,011,239$ 31,092,587$ (4,081,348)$

Excess (deficiency) of revenues over (under) expenditures 881$ 881$ (1,061,821)$ (1,062,702)$

OTHER FINANCING SOURCES (USES) Transfers out (881)$ (881)$ (266,092)$ (265,211)$

Total other financing sources and uses (881)$ (881)$ (266,092)$ (265,211)$

Net change in fund balances -$ -$ (1,327,913)$ (1,327,913)$
Fund balances - beginning - - 6,238,162 6,238,162
Fund balances - ending -$ -$ 4,910,249$ 4,910,249$

Budgeted Amounts

County of Russell, Virginia General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

-64-

‘Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

For the Year Ended June 30, 2011

Exhibit 11

REVENUES General property taxes Other local taxes Permits, privilege fees, and regulatory licenses Fines and forfeitures Revenue from the use of money and property Charges for services Miscellaneous Recovered costs Intergovernmental revenues:

Commonwealth

Federal

Total revenues

EXPENDITURES Current: General government administration udicial administration Public safety Public works Health and welfare Education Parks, recreation, and cultural Community development Nondeparimental

Capital projets Debt service:

Principal retrement Interest and other fiscal charges Total expenditures

Excess (deficiency) of revenues over under) expenditures

OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources and uses

Net change in fund balances Fund balances - beginning Fund balances - ending

Variance with Budgeted Amounts Final Budget - Actual Positive Original Final ‘Amounts (Negative $ 12283491 § 12283491 $ 19,548,896 $ 1265405 4309074 4.309.074 4,553,308 154,324 34313 34313 22834 (11479) 4,000 4,000 1,206 206 76812 76812 58,402 (18410) 27 8t7 27 8tT 240951 (6.866) 150,200 180,200 177,989 27.469 1.149866 4,149,866 294.919 (654.947) 8,669,547 8.609.547 aer7si2 7,986

2454979 2.454979 SmaI Sarai $F 30000765 SF 3018 646 $ 1,939.882 $ 1,999.882 $ 1,712,850 $ 227,032 2,088,976 2,088,976 2,106.41 (67,865) 4,805,896 4,805,896 5.206.797 (420,901) 3,571,926 3,571,926 3,305,813 266,113 5,329,104 5,329,104 6.523.318 (1.194244) 5073470 5073470 5,167,968 (94.498) 450,299 450,299 856,723 (106.424) 4,097 202 4,097,202 2:311,048 (1,213,846) : - 103,820 (103,820) 786,963 786 963 4,540,233 (753.270) 1.349.016 1.349.016 1794455 (445,439) 58,505 558,505 742.924 (184.416) Smt 239 $a 011.238 -§ —37,092.587 SF (4,084,348) $ aa_§ 881_$ (1,064,821) $ (1,062,702) $ (a1) $ (681) $ (266.092) $265.21) 3 (a1) $ (661) $266,092) $265.21) $ “$s = $ (1327913) $ —(1327.913) : 6.238.162 6.238.162, 3 = ~ Sasi § 4910249

Exhibit 12

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Revenue from the use of money and property -$ -$ 3,239$ 3,239$

Excess (deficiency) of revenues over (under) expenditures -$ -$ 3,239$ 3,239$

Net change in fund balances -$ -$ 3,239$ 3,239$
Fund balances - beginning - - 1,846,042 1,846,042
Fund balances - ending -$ -$ 1,849,281$ 1,849,281$

Budgeted Amounts

County of Russell, Virginia Special Revenue Fund - Industrial Development Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

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Exhibit 12 County of Russell, Virginia Special Revenue Fund - Industral Development Fund ‘Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

Variance with Budgeted Amounts Final Budget -

Actual Positive

Original Final Amounts (Negative

REVENUES

Revenue from the use of money and property 8 -$ -$ 3.239 $ 3.239 Excess (deficiency) of revenues over (under) expenditures 8 -$ -$ 3230 $ 3.239 Net change in fund balances, $ -$ -$ 3239 $ 3.239 Fund balances - beginning - = 4,846,042 4,846,082 Fund balances - ending 3 = — $1,840,261 1,640,281

65-

Exhibit 13

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Other local taxes 3,575,600$ 3,575,600$ 1,787,521$ (1,788,079)$
Revenue from the use of money and property - - 10,373 10,373

Total revenues 3,575,600$ 3,575,600$ 1,797,894$ (1,777,706)$

EXPENDITURES Current:

Public works 3,575,600$ 3,575,600$ 796,466$ 2,779,134$

Excess (deficiency) of revenues over (under) expenditures -$ -$ 1,001,428$ 1,001,428$

Net change in fund balances -$ -$ 1,001,428$ 1,001,428$
Fund balances - beginning - - 1,514,134 1,514,134
Fund balances - ending -$ -$ 2,515,562$ 2,515,562$

Budgeted Amounts

County of Russell, Virginia Special Revenue Fund - Coal Road Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

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Special Revenue Fund - Coal Road Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance: For the Year Ended June 30, 2011

County of Russell, Virginia

Budget and Actual

Exhibit 13

REVENUES Other local taxes

Revenue from the use of money and property, Total revenues

EXPENDITURES Current: Public works

Excess (deficiency) of revenues over (under) expenditures [Net change in fund balances

Fund balances - beginning Fund balances - ending

Variance with Budgeted Amounts Final Budget - Actual Positive

Original Final ‘Amounts Negative) $ 3,575,600 3,575,600 41,787,521 (1,788,079)

- 10,373 10,373 S_3575,600 3,575,600 797,894 C777, 706) $__ 3.575.600 3,575,600 796,466 2,779,134 $ : : 41,001,428 4,001,428 $ : : 1,001,428 1,001,428 : : 4514,134 4514,134

$ = oi 2.515.560 2.516.560

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Exhibit 14

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Intergovernmental revenues:

Commonwealth -$ -$ 67,834$ 67,834$
Federal 2,167,976 2,167,976 2,073,753 (94,223)

Total revenues 2,167,976$ 2,167,976$ 2,141,587$ (26,389)$

EXPENDITURES Current:

Health and welfare 2,167,976$ 2,167,976$ 2,118,529$ 49,447$

Excess (deficiency) of revenues over (under) expenditures -$ -$ 23,058$ 23,058$

Net change in fund balances -$ -$ 23,058$ 23,058$
Fund balances - beginning - - - -
Fund balances - ending -$ -$ 23,058$ 23,058$

County of Russell, Virginia Special Revenue Fund - Workforce Investment Board Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

Budgeted Amounts

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Schedule of Revenues, Expenditures, and Changes in Fund Balance: For the Year Ended June 30, 2011

County of Russell, Virginia ‘Special Revenue Fund - Workforce Investment Board Fund

Budget and Actual

Exhibit 14

REVENUES Intergovernmental revenues: Commonwealth Federal Total revenues

EXPENDITURES Current: Health and welfare

Excess (deficiency) of revenues over (under) expenditures "Net change in fund balances

Fund balances - beginning Fund balances - ending

Variance with Budgeted Amounts Final Budget - Actual Positive Original Final ‘Amounts Negative) $ : : 67,834 67,834 2,167,976 2,167,976 2,073,753 (94.223 32,167,976 2.167 976 2.141 587 (26,389 $2,167,976 2,167,976 2,118,528 49.447 s : : 23,058 23,058 $ : : 23,058 23,058 g = 5 23058 23058

61-

Exhibit 15

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Intergovernmental revenues:

Commonwealth 83,233$ 83,233$ -$ (83,233)$

EXPENDITURES Current:

Health and welfare 84,114$ 84,114$ 20,205$ 63,909$

Excess (deficiency) of revenues over (under) expenditures (881)$ (881)$ (20,205)$ (19,324)$

OTHER FINANCING SOURCES (USES) Transfers in 881$ 881$ 20,205$ 19,324$

Net change in fund balances -$ -$ -$ -$
Fund balances - beginning - - - -
Fund balances - ending -$ -$ -$ -$

Budgeted Amounts

County of Russell, Virginia Special Revenue Fund - Rental Assistance Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2011

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County of Russell, Virginia Special Revenue Fund - Rental Assistance Fund ‘Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

Exhibit 15

REVENUES Intergovernmental revenues: ‘Commonwealth

EXPENDITURES: Curent Health and welfare

Excess (deficiency of revenues over (under) expenditures

OTHER FINANCING SOURCES (USES) Transfers in

Net change in fund balances Fund balances - beginning Fund balances - ending

For the Year Ended June 30, 2011 Variance with

Budgeted Amounts Final Budget -

‘Actual Positive

Original Final ‘Amounts (Negative) S 63233 § 3.233 § 8 (63.233) Swia $s eatta § 20.208 63,900 s (eat) $ (8) $2008) § (19.324) s ears eet $20,205 $ 19,324 8 “8 “8 “8 : s —s 3 3 =

68-

Exhibit 16

Priimary Government

County Retirement Plan:

Actuarial Actuarial Unfunded Funded Ratio Annual UAAL as a Valuation Value of Accrued AAL (UAAL) Assets as % Covered % of Covered

as of Assets Liability (AAL) (3) - (2) of AAL (2)/(3) Payroll Payroll (4)/(6) (1) (2) (3) (4) (5) (6) (7)

June 30, 2010 19,759,376$ 26,221,057$ 6,461,681$ 75.36% 5,581,443$ 115.77% June 30, 2009 19,933,712 23,803,518 3,869,806 83.74% 5,559,094 69.61% June 30, 2008 19,979,433 22,063,871 2,084,438 90.55% 5,013,469 41.58%

County Other Postemployment Benefits-Health Insurance:

Actuarial Actuarial Unfunded Funded Ratio Annual UAAL as a Valuation Value of Accrued AAL (UAAL) Assets as % Covered % of Covered as of (*) Assets Liability (AAL) (3) - (2) of AAL (2)/(3) Payroll Payroll (4)/(6)

(1) (2) (3) (4) (5) (6) (7)

July 1, 2010 -$ 464,748$ 464,748$ 0.00% 5,581,443$ 8.33% July 1, 2008 - 546,570 546,570 0.00% 4,198,697 13.02%

County Other Postemployment Benefits-VRS Health Insurance Credit:

(1) (2) (3) (4) (5) (6) (7)

June 30, 2010 71,521$ 76,866$ 5,345$ 93.05% 5,581,443$ 0.10% June 30, 2009 60,586 72,718 12,132 83.32% 5,559,094 0.22% June 30, 2008 75,699 132,923 57,224 56.95% 5,013,469 1.14%

Discretely Presented Component Unit:

School Board Non-Professional Retirement Plan:

Actuarial Actuarial Unfunded Funded Ratio Annual UAAL as a Valuation Value of Accrued AAL (UAAL) Assets as % Covered % of Covered

as of Assets Liability (AAL) (3) - (2) of AAL (2)/(3) Payroll Payroll (4)/(6) (1) (2) (3) (4) (5) (6) (7)

June 30, 2010 10,392,200$ 15,863,210$ 5,471,010$ 65.51% 2,838,654$ 192.73% June 30, 2009 10,588,117 14,751,035 4,162,918 71.78% 2,878,696 144.61% June 30, 2008 10,678,577 13,994,136 3,315,559 76.31% 2,603,882 127.33%

School Board Other Postemployment Benefits-Health Insurance:

(1) (2) (3) (4) (5) (6) (7)

July 1, 2010 -$ 3,030,967$ 3,030,967$ 0.00% 20,559,274$ 14.74% July 1, 2008 - 3,755,059 3,755,059 0.00% 24,186,441 15.53%

*Only two years available

County of Russell, Virginia Required Supplementary Information

Schedules of Pension and OPEB Funding Progress For the Year Ended June 30, 2011

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County of Russel, Virginia

Required Supplementary Information

‘Schedules of Penson and OPEB Funding Progress Forthe Year Ended June 90,2011,

Exhibit 16

Primary Government

County eirement Pa:

Acuaral ‘etati ntunded —FundedRato Annual UaAL asa Vaaton Vale of poses AALIUAAL) —Asstsas% Covered Sho Covored asof Asses sity (AL) (G)-(@) TAAL) Paya_—Pyrl a6) @ @ @ @ @ 7) June30,2010 $ Y97595T $ MADIOST-$ GABLE —«TSIHH «$NA HIST June 30,2008 19933,712 23908518 ‘a8ea06 BB 74% 555008 6961% ‘une 30,2008 ‘9g79423 zossar 2084438 SDH 5013469 4158% County Otter Postenplyant Benet Hath insurance Actuaral ‘Acta Ununded Funded Ratio Annual UaAL asa Vataton Vale of eons MAL(UAAL) ——Assetsas% Covered Sof Covered asof() Asses Lia) G2) IAAL) Payel_—_ aye 6) @ 8 @ co) co) a suy1,2010 cL daly , 2008 . 586570 546570 0.00% 4198697 1302%, County Otter Postemployrant Benois VRS Heath Insurance Cred Acwaral evar ntunded ——FundedRato Annual UatL asa Vaaton Vale of poms AAL(UAAL) —Asstsas% Covered Sof Covred sof) Asses uit (AL) (8)-(2) TAAL (2S) Payoh—_Pyl 46) @ @ Co) ® @ @ a June30,2010 $ —«THS2 «$= 5RBKCOC*S:=SCCSMS = SHOSH «SS SRIAAS OOH ‘June 30,2008 60585, m8 wie BR 558900 022%, une 30,2008 75809 12908 srz4 585% 501349 1.14% Discretely Presented Component Unt: ‘Schoo Board Non ProfesinalRetrement Plan: Actuarial eta Ununded ——FundecRato Annual UaAL as Vataton Vale of ‘Aeowed AAL(UAAL) —Assets.as% «Covered Spf Covered asol Asses Lusi (AL) ()-@) of AAL@(3)_Payol—_Payel 6) ) @ 3 @ é) co) @ June30,2010 $ 10390200 $8983.21 -$ SaTtOT este $B T8DTBH ‘une 20,2008 1.586.117 4751.05 atez918 71785 2arEs98 145% June 30,2008 ‘og78.s77 13,904,196 3315858 7631% 2eoses 127.3% ‘Schoo Board Oe Pstampioment Benes Heal insurance ‘evar Ununded ——FundedRato Annual UaAL asa Vuaton onad MALIUAAL) —Assts.as% Covered =f Covred sof") Lusi (RAL) (=) _ofAAL VS) Payol—_Payr 6) oT o ® cc) co) @ uys,200 = $ 3030967 § 3080967 oH $a SBRAT TATA sly 1,208 : 8788.58 785059 a.00% Davebae! 155%

“Oly wo years avaible

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Other Supplementary Information

FIDUCIARY FUNDS

Special Welfare – The Special Welfare fund accounts for those funds belonging to individuals entrusted to the local social services agency, such as foster care children.

FIDUCIARY FUNDS

Special Welfare — The Special Welfare fund accounts for those funds belonging to individuals entrusted to the local social services agency, such as foster care children

Exhibit 17

Balance Balance Beginning End

of Year Additions Deletions of Year

Assets Current Assets Cash and cash equivalents Special Welfare Fund 54,533$ 116,009$ (107,726)$ 62,816$

Liabilities Amounts held for social services clients 54,533$ 116,009$ (107,726)$ 62,816$

County of Russell, Virginia Statement of Changes in Assets and Liabilities

Agency Funds For the Year Ended June 30, 2011

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County of Russell, Virginia Statement of Changes in Assets and Liabi ‘Agency Funds For the Year Ended June 30, 2011

Exhibit 17

Balance Balance Bec End of Year Additions Deletions of Year Assets Current Assets, Cash and cash equivalents Special Welfare Fund S$ 54533 $116,009 © _$ (107,726) $62,816 Liabilities ‘Amounts held for social services clients S$ 54533 $116,009 _$ (107.726) $62,816

-0-

DISCRETELY PRESENTED COMPONENT UNIT – SCHOOL BOARD

MAJOR GOVERNMENTAL FUNDS

School Operating Fund - The School Operating Fund accounts for and reports the operations of the County’s school system. Financing is provided by the State and Federal governments as well as contributions from the General Fund.

DISCRETELY PRESENTED COMPONENT UNIT - SCHOOL BOARD

MAJOR GOVERNMENTAL FUNDS

Exhibit 18

School Operating

Fund

ASSETS Cash and cash equivalents 2,244,246$
Receivables (net of allowance

for uncollectibles): Accounts receivable 34,707

Due from other governmental units 2,103,255
Prepaid items 115,673

Total assets 4,497,881$

LIABILITIES AND FUND BALANCES Liabilities:

Accounts payable 413,190$
Salaries payable 997,101

Total liabilities 1,410,291$

Fund balances: Nonspendable:

Prepaid items 115,673$
Committed:

Textbook purchases 200,387
Unassigned: 2,771,530

Total fund balances 3,087,590$
Total liabilities and fund balances 4,497,881$

Amounts reported for governmental activities in the statement of net assets (Exhibit 1) are different because:

Total fund balances per above 3,087,590$

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 17,351,889

Long-term liabilities, including early retirement incentives, are not due and payable in the current period and, therefore, are not reported in the funds. (1,028,885)

Net assets of governmental activities 19,410,594$

County of Russell, Virginia Balance Sheet

Discretely Presented Component Unit - School Board June 30, 2011

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County of Russell, Virgi

Discretely Presented Component Unit - School Board

Balance Sheet

June 30, 2044

ASSETS Cash and cash equivalents Receivables (net of allowance

for uncollectibes):

Accounts receivable Due from other governmental units Prepaid items

Total assets

LIABILITIES AND FUND BALANCES Liabilities: ‘Accounts payable Salaries payable Total liabilities

Fund balances: Nonspendable: Prepaid items Committed: Textbook purchases Unassigned: Total fund balances Total iabilties and fund balances

‘Amounts reported for governmental activities in the statement of net assets (Exhibit 1) are different because:

Total fund balances per above

Capital assets used in govermmental activities are not financial resources and, therefore,

are not reported in the funds.

Long-term labile, including early retirement incentives, are not due and payable in the current

period and, therefore, are not reported in the funds.

Net assets of governmental activities,

School Operating Fund

S$ 2,244,246

34,707 2,103,255

8 413,190 997,101, 7.410.297

8 115,673,

200,387 2,771,530 3,087,590 4497 881

$3,087,590 17,351,889 (1,028,885) S__ 19,470,504

Exhibit 19

School Operating

Fund REVENUES Revenue from the use of money and property 1,500$
Charges for services 861,042
Miscellaneous 239,214
Recovered costs 603,480
Intergovernmental revenues:

Local government 4,987,190
Commonwealth 24,620,227
Federal 9,823,404

Total revenues 41,136,057$

EXPENDITURES Current:

Education 40,092,916$

Excess (deficiency) of revenues over (under) expenditures 1,043,141$

Net change in fund balances 1,043,141$
Fund balances - beginning 2,044,449
Fund balances - ending 3,087,590$

Amounts reported for governmental activities in the statement of activities (Exhibit 2) are different because

Net change in fund balances - total governmental funds - per above 1,043,141$

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore are not reported as expenditures in governmental funds 35,693

Change in net assets of governmental activities 622,289$

County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds - Discretely Presented Component Unit - School Board For the Year Ended June 30, 2011

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Exhibit 19 County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds - Discretely Presented Component Unit - School Board For the Year Ended June 30, 2014

School Operating Fund REVENUES Revenue from the use of money and property $ 1,500 Charges for services 861,042 Miscellaneous 239,214 Recovered costs 603,480 Intergovermmental revenues: Local government 4,987,190 ‘Commonwealth 24,620,227 Federal 9,823,404 Total revenues EXPENDITURES Current Education $40,092,916

Excess (deficiency) of revenues over (under)

expenditures, 41,043,144 Net change in fund balances $1,043,141 Fund balances - beginning Fund balances - ending $3,087,590

‘Amounts reported for governmental activites inthe statement of activites (Exhibit 2) are different because Net change in fund balances - total governmental funds - per above $1043.14 Governmental funds report capital outlays as expenditures. However, in the statement of

‘activities the cost of those assets is allocated over their estimated useful ives and reported ‘as depreciation expense. Thisis the amount by which the capital outlays exceeded depreciation in

the current perio. (456,545) ‘Some expenses reported in the statement of activities do not require the use of current

financial resources and, therefore are not reported as expenditures in governmental funds 35,693, Change in net assets of governmental activities 622,208

T2-

Exhibit 20

Variance with Final Budget

Positive Original Final Actual (Negative)

REVENUES Revenue from the use of money and property 20,561$ 20,561$ 1,500$ (19,061)$
Charges for services 792,844 792,844 861,042 68,198
Miscellaneous 157,546 157,546 239,214 81,668
Recovered costs 474,642 474,642 603,480 128,838
Intergovernmental revenues:

Local government 5,027,893 5,027,893 4,987,190 (40,703)
Commonwealth 24,959,789 24,959,789 24,620,227 (339,562)
Federal 11,011,847 12,125,929 9,823,404 (2,302,525)

Total revenues 42,445,122$ 43,559,204$ 41,136,057$ (2,423,147)$

EXPENDITURES Current:

Education 42,845,122$ 43,959,204$ 40,092,916$ 3,866,288$

Excess (deficiency) of revenues over (under) expenditures (400,000)$ (400,000)$ 1,043,141$ 1,443,141$

Net change in fund balances (400,000)$ (400,000)$ 1,043,141$ 1,443,141$
Fund balances - beginning 400,000 400,000 2,044,449 1,644,449
Fund balances - ending -$ -$ 3,087,590$ 3,087,590$

Budgeted Amounts

County of Russell, Virginia Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

Discretely Presented Component Unit - School Board For the Year Ended June 30, 2011

School Operating Fund

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Exhibit 20 County of Russell, Virginia Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Discretely Presented Component Unit - School Board For the Year Ended June 30, 2014

‘School Operating Fund,

Variance with Final Budget Budgeted Amounts Positive Original Final ‘Actual (Negative)

REVENUES Revenue from the use of money and proper $ 20,561 $ 20561 $ 1,500 $ (19,064) Charges for services 792,844 792,844 861,042 68,198 Miscellaneous 187,546 187,546 239,214 81,668 Recovered costs ATA GAD 474,642 603,480 128,838, Intergovernmental revenues:

Local government 5,027,898 5,027,893 4,987,190 (40,703)

Commonwealth 24,959,788 24,959,789 24,620,227 (339,562)

Federal 411,011,847 42,125,929 9,823,404 (2,302,525)

Total revenues S_2405,122 FS 43,559,200 § 41,136057 $ (2.423,147)

EXPENDITURES: Current:

Education $42,845,122 $ 43,959,204 $§ 40,092,916 _$ 3,866,288 Excess (deficiency) of revenues over (under)

expenditures $ (400,000) $ (400,000) $_—1,043,141 $1,443,141, Net change in fund balances $ (400,000) $ (400,000) $4,043,141 $1,443,141,

Fund balances - beginning 400,000 400,000, 2,044,448 1,644,449 Fund balances - ending 3 _$ = $3,087,590 $3,087,580

-T3-

Supporting Schedules

Schedule 1 Page 1 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

General Fund: Revenue from local sources:

General property taxes: Real Property Tax 5,505,575$ 5,505,575$ 6,308,231$ 802,656$
Real and Personal PSC Tax 1,600,000 1,600,000 2,220,978 620,978
Personal Property Tax 2,445,891 2,445,891 2,269,091 (176,800)
Mobile Home Tax 115,000 115,000 112,450 (2,550)
Machinery and Tools Tax 1,602,000 1,602,000 1,427,156 (174,844)
Merchants Capital 34,200 34,200 29,525 (4,675)
Mineral Tax 798,000 798,000 856,978 58,978
Penalties 50,000 50,000 109,316 59,316
Interest 132,825 132,825 215,171 82,346

Total general property taxes 12,283,491$ 12,283,491$ 13,548,896$ 1,265,405$

Other local taxes: Local Sales and Use Tax 1,873,172$ 1,873,172$ 1,832,391$ (40,781)$
Consumers’ Utility Tax 612,456 612,456 587,625 (24,831)
Consumption Taxes 92,039 92,039 93,818 1,779
Franchise License Tax - - 17,952 17,952
Coal Severance Tax 1,612,057 1,612,057 1,787,521 175,464
E911 tax 94,170 94,170 86,876 (7,294)
Grantee tax 115,180 115,180 101,414 (13,766)
Motor Vehicle Licenses - - 25,615 25,615
Taxes on Recordation and Wills - - 20,186 20,186

Total other local taxes 4,399,074$ 4,399,074$ 4,553,398$ 154,324$

Permits, privilege fees, and regulatory licenses: Animal licenses 1,000$ 1,000$ 1,569$ 569$
Transfer fees 750 750 812 62
Building permits 32,000 32,000 18,494 (13,506)
Other permits and other licenses 563 563 1,959 1,396

Total permits, privilege fees, and regulatory licenses 34,313$ 34,313$ 22,834$ (11,479)$

Fines and forfeitures: Court fines and forfeitures 1,000$ 1,000$ 1,206$ 206$

Revenue from use of money and property: Revenue from use of money 76,812$ 76,812$ 58,402$ (18,410)$

Charges for services: Charges for law enforcement and traffic control 25,000$ 25,000$ 2,153$ (22,847)$
Charges for Commonwealth’s Attorney 1,500 1,500 2,338 838
Miscellaneous jail and inmate fees - - 3,833 3,833
District court fees - - 3,206 3,206
Clerk’s collections - - 892 892
Charges for sanitation and waste removal 164,155 164,155 134,370 (29,785)
Charges for library 23,117 23,117 7,394 (15,723)
Courthouse maintenance fees 6,045 6,045 7,185 1,140
Courthouse security fees - - 38,445 38,445
Cannery charges 28,000 28,000 27,590 (410)
Other charges for services - - 13,545 13,545

Total charges for services 247,817$ 247,817$ 240,951$ (6,866)$

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

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County of Russo, Viginia

Schedule 1

Schedule of Revenues - Budget and Actual ge 1 of 6 ‘Governmental Funds For the Year Ended June 30,2011 Variance with Final Budget - Final Positive Fund, ‘Actual ‘Nogative General Fund: Reverue fom local sources: General property tas: Real Property Tax S 5505575 $ 5505575 $ 6.308251 $ 802656, Real and Personal PSC Tax ‘60000 6000002200878, en0a7e Personal Property Tax 2aisgor 2.445801 2.268001 (176,00) Nobile Home Tax 115000 115000 112450 (2850) Machinery and Tools Tax 102000 © 1802.00 1.427.186 (174,344) Merchans Cail 34.200, 34.200, 29525 (4878) Mineral Tax 798,000 798,000 896.978 58978 Penalies 50,000, 50,000, 109.318 59.318 Interest 132.825 132825 215.171 82.346 Total general property taxes T_apasat Sa peAat STs eee _S—1265.405 Other ocal taxes: Loca Sle and Use Tax S$ 1arai2 $ 187372 § 1832501 § (40781) Consumers Uity Tax 612.456 612456, 87 625 (24a) Consumption Taxes 92.088 92038 93818 1778 Franchise License Tax 17952 17952 Coal Severance Tax 112057 1612057 1.787.521 175.464 Ett tax 94,170 94170 88,876 (7298) Grane tax 115.180 115.180 wise (13765) Noor Vehicle Licenses 25618 250615 Taxes on Recordation and Wis : : 20,185 20,186 Total ther ical taxes S__EOT Se S 3908 SE Permits, plage fees, and rogulatry licenses: ‘Animal enses $ 1.000 4.000 1589 § 569 Transl fees 750 750 812 6 Bling permits 32,000 32000 15494 (13.506) (ther permits and other censes 583. 583 11959 41396 Total permits, rvlege fees, and regulatory Hoenses EES EEE mae 8 Tara) Fines and foetus: Cour fines and fortes $ 4,000 4,000 1208 $ 206. Revenue fom use of money and propery: Revenue fom use of money s rest2 7812 sao § (18.410) Charges for senioes ‘Charges for law enforcement and afc contol $2000 25000, 2189 § —(2een) (Charges for Commoneat’s Attoey 1.500 1.500 2338 38 Niscllaneous ja and iat 5833 3833 Distt cou feos 3208 3208 Clr’ colectons 92 92 (Charges for saritation and waste removal 164,155 164,15 134370 (29,725) Charges fe brary ai 27 794 (15.728) Courthouse maintenance fees 6045, 6045 7185 1140 Courthouse secu fees 38.45 38.45 Cannery charges 23.000 000 77590 a0) Cher charges for services 419545 15545 Total charges for services 32a aia 20.951 (6.6)

Th.

Schedule 1 Page 2 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

General Fund: (Continued) Revenue from local sources: (Continued)

Miscellaneous revenue: Sale of maps, ordinances -$ -$ 438$ 438$
Donations - - 24,491 24,491
Miscellaneous other 150,200 150,200 136,085 (14,115)
Sheriff’s Department - - 16,655 16,655

Total miscellaneous revenue 150,200$ 150,200$ 177,669$ 27,469$

Recovered costs: Housing Fund -$ -$ 1,800$ 1,800$
Telephone - - 3,326 3,326
Extradition expense - - 87 87
Recovered Cost - Social Services 20,000 20,000 38,337 18,337
Recovered Cost - Health Department - - 51,327 51,327
Recovered Cost - Tax Collections 50,000 50,000 2,287 (47,713)
Recovered Cost - Sheriff 4,500 4,500 112,500 108,000
Insurance recoveries - - 62,413 62,413
Restitution - - 11,375 11,375
Recovered Cost - Alcohol Safety 323,366 323,366 5,620 (317,746)
Recovered Cost - Regional Jail - - 5,320 5,320
Recovered Cost - Industrial 752,000 752,000 - (752,000)
Other Recovered Costs - - 527 527

Total recovered costs 1,149,866$ 1,149,866$ 294,919$ (854,947)$

Total revenue from local sources 18,342,573$ 18,342,573$ 18,898,275$ 555,702$

Revenue from the Commonwealth: Noncategorical aid:

Motor vehicles carriers’ tax 129,600$ 129,600$ 124,029$ (5,571)$
Mobile home titling tax 100,700 100,700 135,780 35,080
Motor vehicle rental tax - - 2,999 2,999
Communications tax 796,921 796,921 896,967 100,046
State recordation tax 20,000 20,000 41,424 21,424
Personal property tax relief act funds 1,350,000 1,350,000 1,437,003 87,003

Total noncategorical aid 2,397,221$ 2,397,221$ 2,638,202$ 240,981$

Categorical aid: Shared expenses:

Commonwealth’s attorney 261,069$ 261,069$ 302,244$ 41,175$
Sheriff 1,153,817 1,153,817 1,262,618 108,801
Commissioner of revenue 148,170 148,170 155,384 7,214
Treasurer 145,645 145,645 103,032 (42,613)
Medical examiner 400 400 - (400)
Registrar/electoral board 65,000 65,000 41,225 (23,775)
Clerk of the Circuit Court 307,170 307,170 241,798 (65,372)
Total Shared Expenses 2,081,271$ 2,081,271$ 2,106,301$ 25,030$

Other categorical aid: Victim witness grant 22,222$ 22,222$ -$ (22,222)$
Community development block grant 65,000 65,000 716,397 651,397
GIS - - 1,590 1,590
Asset forfeiture funds - - 4,983 4,983

-75-

County of Russo, Viginia Schedule 4

Schedule of Revenues - Budget and Actual ge 2of 6 ‘Governmental Funds For the Year Ended June 30,2011 Variance with Final Budget - Final Positive und, Malor and Minor Reven ‘Actual ‘Nogative General Fund: (Continued) Revenue om local sources: (Contnued) Miscellaneous revenue: Sale of maps, ordinances $ $ 8 433 § 438 Donations 24491 24401 NMscellaneous ther 150200 180200 136.085 (14.115) Shetifs Department 16855 16.55 Toll miscelaneous revenue 3 woeo SHR S 7.560 a7.068 Recovered costs Housing Fund $ $ s 1800 § 1.800 Telephone 3926 3326 Exaton expense a7 a Recovered Cos - Social Services 20000 2000 38337 ea07 Recovered Cost Health Deparment 51.27 51.327 Recovered Cost - Tax Cllections 50,000 50000 2387 773) Recovered Cost - Shed 4500, “4500, 112500 108,000 Insurance recoveries 2413 62.413 Resituon 1308 11398 Recovered Cost - cohol Safety 323,566 523.386 5620 (317746) Recovered Cost - Regional Ja 5220 5320 Recovered Cos - Indust 752,000 752,000 : (752000) Otter Recovered Costs 52 527 Total recovered costs 31S STS S_—hgie SASH Total revenue om local sources S18942573 $ 18342573 § 18898275 $555,702 Reverue om the Conmronweath Nncategorial aid: oor veils caries tax $ 129600 $ 129600 § 124020 $= 65TH) edie home ting tax 100,700 100,700 135,780 5,080 tor vil eral tx 2999 2.999 Communications tax 798.921 796,921 896,967 100.046 Slate recordation tax 20.000 20,000 41428 21424 Personal propery tax rl act funds 44350000 1350.000___1.437,008, 87:03 Toll noncategorical aid S__2ao7z21 82397271 _§ 2638202 § 240,961 Categorical i ‘Shared expenses: ‘Commonweat’satomey S$ 254060 $ 264.060 § © age §—at,tTS Sheri 1153817 1153817 1282818. 108.01 (Commissioner of revenve 148,170 148,170 ‘35.384 7214 Treasurer 145 645 145645 103.032 4261) Medical examiner 400 400 : (400) Regsvarllectora board 65,000, 65,000, 41205 23.75) Clerk ofthe Cult Cout 307.170, 307,170 241,798 (65372) Total Srared Expenses S__Zowtat S$ Zostgt $2 106g01-S—25.000, (Other catego ald Victim winess grant S$ mms mans +8 (22222) (Community development block rant 5,000, 5000, 116397 651.397 os 11590 1580 Asset oer funds 4988 4988

T5-

Schedule 1 Page 3 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

General Fund: (Continued) Revenue from the Commonwealth: (Continued)

Categorical aid: (Continued) Other categorical aid: (Continued)

EMS grants 12,000$ 12,000$ 30,448$ 18,448$
Fire Program Funds 35,000 35,000 71,250 36,250
Library grants 80,548 80,548 71,917 (8,631)
Litter control grants 13,500 13,500 12,398 (1,102)
Public assistance - - 1,694,360 1,694,360
Comprehensive services act 619,050 619,050 1,295,877 676,827
School resource officer grants - - 33,789 33,789
Other state funds 3,343,735 3,343,735 - (3,343,735)
Total other categorical aid 4,191,055$ 4,191,055$ 3,933,009$ (258,046)$

Total categorical aid 6,272,326$ 6,272,326$ 6,039,310$ (233,016)$

Total revenue from the Commonwealth 8,669,547$ 8,669,547$ 8,677,512$ 7,965$

Revenue from the federal government: Categorical aid:

CDBG grants -$ -$ 100,846$ 100,846$
ARRA - Violence against women - - 18,061 18,061
Violence against women - - 38,550 38,550
ARRA - Watershed protection grant - - 7,514 7,514
Emergency management grants - - 88,305 88,305
DMV ground transportation safety grant - - 17,186 17,186
Public assistance - - 2,149,121 2,149,121
ARRA - Public assistance - - 35,396 35,396

Total categorical aid -$ -$ 2,454,979$ 2,454,979$

Total revenue from the federal government -$ -$ 2,454,979$ 2,454,979$

Total General Fund 27,012,120$ 27,012,120$ 30,030,766$ 3,018,646$

Special Revenue Funds: Industrial Development Fund: Revenue from local sources:

Revenue from use of money and property: Revenue from the use of money -$ -$ 3,239$ 3,239$

Total Industrial Development Fund -$ -$ 3,239$ 3,239$

Coal Road Fund: Revenue from local sources:

Other local taxes: Coal road taxes 3,575,600$ 3,575,600$ 1,787,521$ (1,788,079)$

Revenue from use of money and property: Revenue from the use of money -$ -$ 10,373$ 10,373$

Total revenue from local sources 3,575,600$ 3,575,600$ 1,797,894$ (1,777,706)$

Total Coal Road Fund 3,575,600$ 3,575,600$ 1,797,894$ (1,777,706)$

-76-

County of Russo, Viginia Schedule 4

Schedule of Revenues - Budget and Actual ge 30f6 ‘Governmental Funds Forte Year Ended June 30,2011 Variance with Final Budget - Final Positive und, Malor and Minor Reven ‘Actual Negative General Fund: (Continued) Reverue fom the Commonweath: (Continues) ‘Categorical ai (Continued) (ther calegerical et: (Continued) ES gai $1200 $ 1200 § ota $a Fe Program Funds 35000, 35000 71250 96,250 LUbrary ants ans 2058 na17 (e631) Liter conto rants 13500 13500 12398 (1.102) Public assistance 1.604360 1,684.60 Comprehensive sences act 619.050 6190501295877 676827 ‘School resource fear grants 38,789 33,789 Other tate funds 349.795 9:343,735, = 3.343735) Toll the categorical ad T__Aiw1055 Sa 10.055 SSRN S(58048) Total categoria aid S$ e2rs9 $ 6272998 § 6030910 $ 233016) Total venue om the Conmonweath S_aesass7 $ aesasi7 § asr7si2 $ 1988 Revenue fom the federal goverment: Categorical i (CDBG grants $ $ S 100g $s 100846 ARRA Violence aginst women 18081 1,061 Violence agains women 38550 98.50 ARRA - Watershed proecon grant 7516 1514 Emergency management grants 88,305 8,305 DMV ground transportation safety grant 17188 17.186, Public assistance 2awgii21 2.149.121 ARRA Publ assistance 35,396 35,396 Toll categoria aid A A S__2a54970_§ 2454979 Total revenue tom te federal goverment s $ S__2as4970_§ 2454970 Total General Fund $_27012.120 $2701.12 § 20030766 $ 3.018646 ‘Special Revenue Funds: Industrial Development Fund: Revenue fom local sources: Revenue fom use of money and propery: Revenue fom the use of money $ $ 8 3239 § 9299 otal ndustial Development Fund $ $ s 3239 § 3230 ‘coal Road Fune: Revenue fom local sources: ‘ther local taxes: Coal road axes S$ __3575600 $ 3575600 § 1787521 $ (1,788,079) Revenue fom use of money and propery Revenue fom the use of maney 8 8 +8 1973 § 10373 Total revenue om local sources $ 3575600 $ 3575600 § 1797804 $ (1,777,706) Total Coal Road Fund $3575.00 $ 3575600 $ 1707804 $(1777,706)

T6-

Schedule 1 Page 4 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

Special Revenue Funds: (Continued) Rental Assistance Fund: Revenue from the Commonwealth:

Categorical aid: Rental Assistance Grants 83,233$ 83,233$ -$ (83,233)$

Total revenue from the Commonwealth 83,233$ 83,233$ -$ (83,233)$

Total Rental Assistance Fund 83,233$ 83,233$ -$ (83,233)$

Workforce Investment Board Fund: Revenue from the Commonwealth:

Categorical aid: Workforce Investment -$ -$ 67,834$ 67,834$

Total revenue from the Commonwealth -$ -$ 67,834$ 67,834$

Revenue from the federal government: Categorical aid:

Workforce Investment 2,167,976$ 2,167,976$ 2,073,753$ (94,223)$

Total revenue from the federal government 2,167,976$ 2,167,976$ 2,073,753$ (94,223)$

Total Workforce Investment Board Fund 2,167,976$ 2,167,976$ 2,141,587$ (26,389)$

Total Primary Government 32,838,929$ 32,838,929$ 33,973,486$ 1,134,557$

Discretely Presented Component Unit - School Board: School Operating Fund: Revenue from local sources:

Revenue from use of money and property: Revenue from the use of money 19,061$ 19,061$ -$ (19,061)$
Revenue from the use of property 1,500 1,500 1,500 -

Total revenue from use of money and property 20,561$ 20,561$ 1,500$ (19,061)$

Charges for services: Cafeteria sales 682,214$ 682,214$ 620,802$ (61,412)$
Tuition payments - - 8,410 8,410
Drivers Ed fees 14,000 14,000 6,600 (7,400)
Other charges for services 11,000 11,000 80,598 69,598
Regional Adult Education 75,630 75,630 140,590 64,960
GED Testing fees 10,000 10,000 4,042 (5,958)

Total charges for services 792,844$ 792,844$ 861,042$ 68,198$

Miscellaneous revenue: Other miscellaneous 157,546$ 157,546$ 239,214$ 81,668$

Recovered costs: Insurance recoveries -$ -$ 10,982$ 10,982$
Extra duties revenue 23,000 23,000 28,822 5,822
Dual Enrollment 200,000 200,000 337,798 137,798
Sale of Equipment and Supplies 20,000 20,000 11,240 (8,760)
Reimburse Health Services 45,000 45,000 67,694 22,694
Other recovered costs 186,642 186,642 146,944 (39,698)

Total recovered costs 474,642$ 474,642$ 603,480$ 128,838$

Total revenue from local sources 1,445,593$ 1,445,593$ 1,705,236$ 259,643$

-77-

County of Russo, Viginia Schedule 1

Schedule of Revenues -Budget and Actual ge 4of 6 ‘Governmental Funds Forte Year Ended June 30,2011 Variance with Final Budget - Final Positive und, Malor and Minor Reven ‘Actual Negative ‘Special Revenue Funds: (Continued) Rental Asistance Fund: Revenue fom the Conmanwesth ‘Categorical al Renta Assistance Grants S37 § saz § = $(65233) Toll verve om the Commonweath S37 § a7 § = $(65233) Total Rental Assistance Fund Sm § sa § 8 (65239) Workforce Investment Board Fund: Reverue om the Conmronweath ‘Categorical ai Weorkoroe Investment $ $ Sera s_678x otal evenve fom the Conmonweath $ $ Sora sora Reverue om the federal goverment: Categorical ai Weorkoroe Investment $ 2167976 § 2167976 § 2073753 $ (94.229) Total revenue om te federal goverment $ 2167976 § 2167976 § 2073753 $ (94.229) Total Workforce Investment Board Fund S__2167976_$ 2167976 $ 2.141587 $26,280) Total Primary Goverment $ 52838979 § 92838970 § 397.486 §__ 1.134557 Discrtely Presented Component Unit - School Board: ‘School Operating Fun: Revenue fom local sources: Revenue fom use of money and propery Revenue om the use of meney S 19061 § 19061 § = $ (19061) Revenue om te use of propery 1.500 4.500 4.500 - Total venue om use of money and peopety Swe S___os6_f 1500S 884) Charges for services Cafeteria sales S e224 $ © oazM4 § © eogo2 $412) Teton payments. Bat0 Bai0 Divers Ed fees 14000 14000 6600 7400) Other charges for services 11000 +1000 80598 69.59 Regional Adult Education 75530 756550 140 590 64.960 GED Testing foes 10.000 +0000 4042 (5.958) Total charges for services Treas 5 Tanai S BS 8198 Miscellaneous revenve: (ther miscolaneous S 1575 $ 157546 § 239214 $68 Recovered costs Insurance recoveries $ “8 -$ 19g § 19982 Extra dutes revenue 23,000 23,000, 28822 5822 Dual Errliment 200,000 200.000 387,798 137,798 Sale of Equipment and Supplies 20,000, 20,000, 11240 (6760) Reinburse Heath Serves 45000, 45000, 67694 72694 (Other covered costs 106 642 106542 148.944 (29.699) Total recovered costs Sarasa 347455003. 4605188 Total revenue om local sources S$ 144s.so9 $ 1445599 § 1705296 § 250649,

Schedule 1 Page 5 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Intergovernmental revenues: Revenues from local governments:

Contribution from County of Russell, Virginia 5,027,893$ 5,027,893$ 4,987,190$ (40,703)$
Total revenues from local governments 5,027,893$ 5,027,893$ 4,987,190$ (40,703)$

Revenue from the Commonwealth: Categorical aid:

Share of state sales tax 3,057,716$ 3,057,716$ 3,192,938$ 135,222$
Basic Aid 13,828,621 13,828,621 13,101,154 (727,467)
Remedial summer education 178,445 178,445 180,612 2,167
Regular foster care 15,993 15,993 12,264 (3,729)
Gifted and talented 143,535 143,535 143,214 (321)
Remedial education 462,501 462,501 461,468 (1,033)
Special education 1,843,624 1,843,624 1,839,507 (4,117)
Textbook payment 167,585 167,585 167,211 (374)
Career and Technical Education 62,764 62,764 35,031 (27,733)
Alternative education 725,853 725,853 770,520 44,667
Elementary Alternative Education - - 2,575 2,575
Algebra readiness 63,975 63,975 63,856 (119)
Mentor teacher program 8,080 8,080 2,847 (5,233)
Social security fringe benefits 877,157 877,157 875,198 (1,959)
Group life 31,897 31,897 31,825 (72)
Retirement fringe benefits 519,915 519,915 518,754 (1,161)
Early reading intervention 59,910 59,910 98,252 38,342
Adult Education 6,338 6,338 - (6,338)
Homebound education 97,145 97,145 58,944 (38,201)
Vocation education 539,053 539,053 574,297 35,244
At risk payments 533,919 533,919 532,662 (1,257)
Primary class size 572,002 572,002 579,562 7,560
Technology 400,000 400,000 455,217 55,217
Jobs for Virginia Graduates 22,500 22,500 32,250 9,750
Industry Certification Costs - - 3,481 3,481
At risk four-year olds 520,542 520,542 520,542 -
School Food 24,116 24,116 32,162 8,046
Other state funds 75,886 75,886 - (75,886)
GED prep programs 15,717 15,717 104,217 88,500
Lottery payments - - 101,658 101,658
Tobacco Commission 20,000 20,000 17,096 (2,904)
Adult literacy 85,000 85,000 104,000 19,000
Special education-foster care - - 6,913 6,913

Total categorical aid 24,959,789$ 24,959,789$ 24,620,227$ (339,562)$

Total revenue from the Commonwealth 24,959,789$ 24,959,789$ 24,620,227$ (339,562)$

Revenue from the federal government: Categorical aid:

Basic Adult Education 453,160$ 453,160$ 299,213$ (153,947)$
Title I 1,277,967 1,277,967 1,180,478 (97,489)
ARRA - Title I 448,400 448,400 508,916 60,516
Special Education 997,236 997,236 728,381 (268,855)
ARRA - Special Education 446,297 446,297 501,942 55,645
Title VI-B, preschool 35,825 35,825 35,822 (3)
ARRA - Title VI-B, preschool 15,029 15,029 - (15,029)
Vocational education 97,462 97,462 97,462 -
Drug free schools 23,834 23,834 22,739 (1,095)
School Food Program 1,111,129 1,111,129 1,300,669 189,540

-78-

County of Russo, Viginia Schedule 4

Schedule of Revenues - Budget and Actual ge Sof ‘Governmental Funds For the Year Ended June 30,2011 Variance with Final Budget - Final Positive und, Maor and Minor Revenue Sour ‘Actual Negative Disertely Presonted Component Unit - School Board: (Continued) ‘Schoo! Operating Fund: (Continued) Intergovermental revenues Reverues from local governments ‘Contnbuton rom County of Russel, Vigna $ sors $ 507s § 49e7190 § (40,703) Toll evenves from local governments S_5007695_$ 5007.895 § 4967.f00_§ (4,703) Reverue om the Conronweath ‘Categorical ai ‘Share of tale sles tax S 3057718 $ s05r716 $ 3.192038 $ 135222 Basic ld samgert 13828621 13,101,154 727.7) Remedial summer education 178.445 178.445 180.612 2.167 Regular foster care 15993 15993 12284 (729) Gites and talented 143535 143535 13.214 (21) Remedial education 462501 462501 461.468, (1033) Special education 1eiseot 1843624 1.839507 t7) Textbook payment 167585 167585 ‘serait (74) Career and Technical Education 62764 62754 35031 27733) ‘erative education 725853 725853 770520 44867 Elementary AteraiveEducaton : : 2575 2575 Algebra readiness 63.975, 63.975, 63.856, (119) Mentor teacher program 8.080, 3080, 2887 (6.233) Social secur hinge benefs ernst arr.ist 875,198 (1959), Groupie 31.897 31897 311825 7) Retement fnge benefis 519.915, 519.915 518,154 (1.181) Eaty racing intervention 59.10 59910 98.252 38.342 Adult cation 6.338 6338 : (6.338) Hmebound educaton ors 97s sage (8.200) Vocation education 539,053, 530053 574207 352 Arik payments 533919 533.919 582062 (1257) Primary dass size 572.002 572002 579382 1560 Technology 400,000, 400,000, 455217 55.217 Jobs for Virginia Graduates 22.500 22500, 32250 9780 IndustyCerticaion Costs : : 3481 3481 Atti four-year olds 520.542 520 642 5209542 : School Food 24.116 24.116 32,162 8086 Other state funds 75886 753886 : (75,886) ‘GED prep programs 15717 15717 04217 88.500 Lotery payments - 101,858 101.658 Tobacco Commission 20.000 29000 17088 (2904) Aduititeracy 85,000, 85,000, 104,000 19,000 Special education foster care : : 5313, 6913 Total categoria aid T_T SU BOTG_§ Taboo aT_S(59.562) Total revenue tom the Commonwealth $ 24959780 $ 24950780 § 24600207 § (330562) Reverue fom the federal goverment: Categorical ai Basic AduitEducaton S 453160 $ 453,160 $2813 $158,947) Tie! yams sate 1.380478 (e789) ARRA. Tite ‘448,400, ‘48,400 508.916 80516 Special Etucation 997.236 997.236 728381 (268.855) ARRA Special Education 446.297 446.297 501.942 55.645 Tile VB, preschool 35805, 35825 35822 eo ARRA Tite VB, preschoo! 15029 15029 : (15,02) Vocatonl education e742 97.462 97482 : Drug fee schools 238M 23834 22139 (1.098) School Food Progam sais atts 1.300.869, 109.540

-18-

Schedule 1 Page 6 of 6

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Major and Minor Revenue Source

Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Intergovernmental revenues: (Continued) Revenue from the federal government: (Continued)

Categorical aid: (Continued) Educational Jobs program -$ 1,114,082$ 1,049,862$ (64,220)$
Fresh fruit and vegetable program - - 19,208 19,208
Title II 327,208 327,208 254,725 (72,483)
Even start 365,645 365,645 316,196 (49,449)
21st century grant 1,826,501 1,826,501 1,196,134 (630,367)
ARRA - State fiscal stabilization funds 1,487,364 1,487,364 2,164,135 676,771
Learn and serve america 25,000 25,000 20,442 (4,558)
Rural and low income schools - - 90,774 90,774
ARRA - Educational technology - - 14,818 14,818
Educational technology 37,783 37,783 21,488 (16,295)
Other federal funds 2,036,007 2,036,007 - (2,036,007)

Total categorical aid 11,011,847$ 12,125,929$ 9,823,404$ (2,302,525)$

Total revenue from the federal government 11,011,847$ 12,125,929$ 9,823,404$ (2,302,525)$

Total Discretely Presented Component Unit - School Board 42,445,122$ 43,559,204$ 41,136,057$ (2,423,147)$

-79-

County of Russo, Viginia

Schedule 1

-19-

Schedule of Revenues -Budget and Actual ge 6 of 6 ‘Governmental Funds For the Year Ended June 30,2011 Variance with Final Budget - Final Positive und, Maor and Minor Revenue Sour ‘Actual Negative Disertely Presonted Component Unit - School Board: (Continued) ‘Schoo! Operating Fund: (Continued) Intergovemmental venues: Contoued) Revenue fom te federal goverment (Continued) ‘Categorical aid (Continued) Edveatonal Jobs program $ S148 $ — 1049862 $ Fresh fut and vegetable program 19208 Tie 327,208 527 208 254,725 Even start 285.645 355515 316.196 (49.449) 2st entry grant 1826501 1826501 1,196,134 (630,367) ARRA. iate fiscal stablzation funds 1487364 1487.364 2.164.195, ere77t Lea and serve america 25000 25000, mas (4.58), ral and law income schools 90,774 0.774 /ARRA - Educational technology 4318 ats Educatonal technology 37.783 37788 21488 (18.295) (ther ederal funds 2036007 ___2036,007, = (206,007) Toll categoria aid S_Toii gar S12 125908 § OBA § _2.302575) Total verve om te federal government S$ _moiigs7 § 12125999 § gaz3404 § 2.302595) Total Discretely Presented Component Unt» School Board S$ 42445122 § 49550204 § 41196057 $(2423.147)

Schedule 2 Page 1 of 4

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

General Fund: General government administration:

Legislative: Board of supervisors 195,097$ 195,097$ 176,722$ 18,375$

General and financial administration: County administrator 495,141$ 495,141$ 429,961$ 65,180$
Independent auditor 72,000 72,000 58,823 13,177
Commissioner of the revenue 301,979 301,979 274,381 27,598
Real estate assessor 142,022 142,022 100,804 41,218
Real estate assessment 10,000 10,000 23,216 (13,216)
Treasurer 406,481 406,481 384,718 21,763
Auto decals 12,500 12,500 - 12,500
Data processing 90,451 90,451 74,113 16,338

Total general and financial administration 1,530,574$ 1,530,574$ 1,346,016$ 184,558$

Board of elections: Electoral Board 93,650$ 93,650$ 77,839$ 15,811$
General Registrar 120,561 120,561 112,273 8,288

Total board of elections 214,211$ 214,211$ 190,112$ 24,099$

Total general government administration 1,939,882$ 1,939,882$ 1,712,850$ 227,032$

Judicial administration: Courts:

Circuit Court 115,544$ 115,544$ 114,490$ 1,054$
General District Court 16,200 16,200 9,345 6,855
Special Magistrates 15,400 15,400 9,994 5,406
Clerk’s Office 390,187 390,187 346,696 43,491
Sheriff Courts 1,016,162 1,016,162 1,120,411 (104,249)
Victim and Witness Assistance 22,222 22,222 30,877 (8,655)
Law Library - - 3,455 (3,455)

Total courts 1,575,715$ 1,575,715$ 1,635,268$ (59,553)$

Commonwealth’s attorney: Commonwealth’s Attorney 473,261$ 473,261$ 471,373$ 1,888$

Total judicial administration 2,048,976$ 2,048,976$ 2,106,641$ (57,665)$

Public safety: Law enforcement and traffic control:

Sheriff 1,431,974$ 1,431,974$ 1,851,554$ (419,580)$
Alcohol Safety Action Program 323,366 323,366 13,140 310,226
Dare program 4,100 4,100 1,100 3,000

Total law enforcement and traffic control 1,759,440$ 1,759,440$ 1,865,794$ (106,354)$

Fire and rescue services: Volunteer Fire Departments 242,391$ 242,391$ 270,013$ (27,622)$
Ambulance Rescue Squad 170,575 170,575 189,048 (18,473)

Total fire and rescue services 412,966$ 412,966$ 459,061$ (46,095)$

Correction and detention: Operation of Jail 1,524,831$ 1,524,831$ 1,781,659$ (256,828)$
Probation Office 203,900 203,900 207,386 (3,486)

Total correction and detention 1,728,731$ 1,728,731$ 1,989,045$ (260,314)$

Inspections: Building inspector 147,854$ 147,854$ 109,587$ 38,267$

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Function, Activity and Element

-80-

County of Russel, Viginia Schedule 2

‘Schedule of Expenditures - Budget and Actual ge tof ‘Governmental Funds For the Year Ended June 30,2011 Variance with Original Final und, Function, Activity and Element Budget ‘Actual (Negative General Fund: General goverment ainsi Logie Board of supenisors S 195097 $ 195087 $767 $ _ta575 General and fancial amiistation ‘County administrator Saget § 495,441 $—aggbt $65,100 Independent auctor 72,000 72.00 58823, 13177 ‘Commissioner fhe revenue 301978 201.979 274381 27598 Realestate assessor 2022 142022 100 04 41218 Real estate assessment 100000 10,000 23.216 (3.216) Treasurer 408,481 406.481 334718 21768, Auto decals 12500 12500 12500 Data processing 90451 90.451 7413, 16338 “ota general and ancial administration S__Tew0s7e S$ TSOST4 Saat STS Board of lection: lectoral Board S 93650 § 93650 $78 $ tI General Registrar 120561 120.581 112273 8.288 Total board of lotions S__ziaaiS __aiazit$ro0.tt2 $24,089 Total general goverment amiistation S 1939992 § 1939s $ 1712850 $7032 Jul adinisration: Cours: iret Court S 1155S 1155M $4400 § 11058 General Distt Court 16.200 16200 935 6.855 ‘Special Magistrates 15.400, 15.400 9.904 5.406 lets Ofce 300,187 390,187 246.696 43.491 Sheri Courts 1.016.162 so1ei62 1 t204tt (104.249) Vieim and Wins Assistance 222 2m a08T7 (6.655) Law Lbray - 3.455 (3.455 “ota courts S_tereyis_S SST S__1605288 Sa) CCommonweatsatomey: ‘Commonweath’s Atomey S_s73ze1$ 473261 $ arts $ 1,888 Total jucicial administration S 20976 $ 2008976 $ 2.105601 $ (57.688) Publi safety: Lawenfoeament and vac cont ‘Sheri S 143197 § — 1aatgre $ 1851554 $ (419,580) ‘Acobol Safety Acton Program 323.386 323.366 13.140 310208, Date program 4100 4.100, 1.100 3,000 “ota aw enforcement and afc contol S__tysa0 ST yeao SaaS 7H S068. 359 and rescue senices ‘olunee Fie Departments S$ 2izgat $4301 $$ — aD $ (aT) ‘Ambulance Rescue Squod ‘70575 170575 1200048 (18.473) Total fire and resue services 3 __#12.966-§__412985$ 59,051 $46,098) CCoecton and detention: ‘Operation of al S ts2qaa $ 1s24g01 $ 1781659 $256,828) Probaton Office 203,900 203.900 207.386 (3.486 “Tota correction and detanton FS 7 TE TED Inspections: Bulg inspector S_v7ase $_sa7gse $9587 $38,267

Schedule 2 Page 2 of 4

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Function, Activity and Element

General Fund: (Continued) Public safety: (Continued)

Other protection: Forestry Service 12,100$ 12,100$ 12,098$ 2$
Enhanced 911 475,623 475,623 464,323 11,300
Medical Examiner 1,250 1,250 880 370
Emergency Services 117,144 117,144 143,080 (25,936)
Animal Control 129,942 129,942 178,653 (48,711)
Animal Shelter 20,846 20,846 4,276 16,570

Total other protection 756,905$ 756,905$ 803,310$ (46,405)$

Total public safety 4,805,896$ 4,805,896$ 5,226,797$ (420,901)$

Public works: Sanitation and waste removal:

Landfill 1,626,892$ 1,626,892$ 1,697,210$ (70,318)$
Refuse collection 1,045,000 1,045,000 716,676 328,324
Litter Coordinator 75,602 75,602 77,363 (1,761)

Total sanitation and waste removal 2,747,494$ 2,747,494$ 2,491,249$ 256,245$

Maintenance of general buildings and grounds: General properties 824,432$ 824,432$ 814,564$ 9,868$

Total public works 3,571,926$ 3,571,926$ 3,305,813$ 266,113$

Health and welfare: Health:

Health Department 385,720$ 385,720$ 339,859$ 45,861$

Mental health and mental retardation: Cumberland Mountain Community Services Board 45,220$ 45,220$ 49,095$ (3,875)$

Welfare/Social Services: Health and welfare 3,992,864$ 3,992,864$ 70,612$ 3,922,252$
Social services 24,619 24,619 4,270,273 (4,245,654)
Comprehensive Services Act 783,188 783,188 1,695,705 (912,517)
Appalachian Agency for Senior Citizens 86,555 86,555 86,836 (281)
Lebanon Speech and Hearing 10,938 10,938 10,938 -

Total welfare 4,898,164$ 4,898,164$ 6,134,364$ (1,236,200)$

Total health and welfare 5,329,104$ 5,329,104$ 6,523,318$ (1,194,214)$

Education: Contributions to County School Board 5,027,893$ 5,027,893$ 4,987,190$ 40,703$
SVCC Contribution 45,577 45,577 180,778 (135,201)

Total education 5,073,470$ 5,073,470$ 5,167,968$ (94,498)$

Parks, recreation, and cultural: Parks and recreation:

Recreation Park 91,748$ 91,748$ 82,735$ 9,013$

Library: Public Library 358,551$ 358,551$ 473,988$ (115,437)$

Total parks, recreation, and cultural 450,299$ 450,299$ 556,723$ (106,424)$

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County of Russel, Viginia Schedule 2 ‘Schedule of Expenditures - Budget and Actual ge 2 of ‘Governmental Funds Forte Year Ended June 30,2011 Variance with Final Budget - Original Positive and Element Budget ‘Actual (Negative Publi safety: (Continues) (Othe protection: Foresty Service S 12100 § 12,100 12098 $ 2 Enhaness 911 475623, 475623 464303, 11300 Medical Exainer 4.250 1250 80 370 Emergency Services amr 117.144 143080 (25.936) ‘sil Control 125982 129.942 178853 (amt) ‘nial Shter 20.46 20.846 4276 16570 Total ober protection 5 756.905 5 756.505 3.3108 16.405) Total public safety Sap05096 § 4905e05 $ sz067e7 $ (420801) Public works: Sanitation and waste removal andfit S$ s625e92 § — 1e26gs2 $ 1997210 § (TOT) Refuse eolecton 4,046,000 1,046,000, 716.676 3824 Liter Coordinator 75600 75.6502 71368 (1764 “ota sanitation and wast removal S_27ar sat SD YaT AG SIMA SIS Maintenance of general buldings and grounds: General properties Sais $s aease si4seu $9,868, Total public works S$ a57192 § 35719 $ 3905813 § 266.119 Heath and were: Heath Heath Department Ss86700 § 985,720 399950 § 45.661 Mental health and mental retardation: ‘Cumberand Mountain Community Senices Board S 45200 $ 45200 49005 $3.75) Wetare’Socil Series: Heath and weltare S$ aonzese $ 3.902888 rosi2 $ g922a52 Secialsenicas 24619 24gi9 4270.27 (4,245,654) ‘Comprehensive Series Act 783,188 783,188 1,695,705, (12517) ‘Appalacian Agency for Senior Ctzens 85.5 88 55, 98.836 (231) Lebanon Speech and Hearing 10,938 10938 10938 Tota were S__aiee 164 Sia. te Sasa SETH “otal heath and wetlare S sara s 5329104 $ as233t8 $ (1.194214) Esucaton CContributons to County Sco! Board S$ 50zrsas $ 027863 $ 4987.10 $ 40703 ‘SVOC Contrbuton 45577 45577 180.778 (135.201 Total education 35073470 $5 073.470_$ 5.67. 968$ (94.408) Perks, recreation, and otra Patks and rereaton Recreaton Park S917 § ons 82735 $018, brane Publ bray S__sssst_s__3sa.sst 473908 $ (115437) “ota parks, recreation, and cultural Ss ss0200s 450.200 556723 $ (106.424)

Bi.

Schedule 2 Page 3 of 4

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Function, Activity and Element

General Fund: (Continued) Community development:

Planning and community development: Planning Commission 63,500$ 63,500$ 46,817$ 16,683$
Community Development 83,205 83,205 140,044 (56,839)
Contribution to Industrial Development Authority - - 1,058,677 (1,058,677)
Industrial Development 597,317 597,317 443,988 153,329
PSA Contributions - - 345,000 (345,000)
Cumberland Plateau 33,583 33,583 33,583 -
Regional Housing 14,393 14,393 14,393 -
Highway Safety Commission 2,400 2,400 1,628 772
Canneries 128,904 128,904 101,192 27,712
Tourism 70,365 70,365 62,222 8,143

Total planning and community development 993,667$ 993,667$ 2,247,544$ (1,253,877)$

Environmental management: Soil and Water Conservation 31,215$ 31,215$ 31,215$ -$

Cooperative extension program: VPI Extension 72,320$ 72,320$ 32,289$ 40,031$

Total community development 1,097,202$ 1,097,202$ 2,311,048$ (1,213,846)$

Nondepartmental: Nondepartmental -$ -$ 103,820$ (103,820)$

Capital projects: Water projects -$ -$ 9,387$ (9,387)$
Other capital projects 786,963 786,963 953,195 (166,232)
School projects - - 577,651 (577,651)

Total capital projects 786,963$ 786,963$ 1,540,233$ (753,270)$

Debt service: Principal payments 1,349,016$ 1,349,016$ 1,794,455$ (445,439)$
Interest Expense 558,505 558,505 742,921 (184,416)

Total debt service 1,907,521$ 1,907,521$ 2,537,376$ (629,855)$

Total General Fund 27,011,239$ 27,011,239$ 31,092,587$ (4,081,348)$

Special Revenue Funds: Coal Road Fund: Public Works:

Maintenance of highways, streets, bridges and sidewalks: Maintenance of highways, streets, bridges and sidewalks 3,000,600$ 3,000,600$ 254,117$ 2,746,483$
Virginia coalfield 575,000 575,000 542,349 32,651

Total Public Works 3,575,600$ 3,575,600$ 796,466$ 2,779,134$

Total Coal Road Fund 3,575,600$ 3,575,600$ 796,466$ 2,779,134$

Rental Assistance Fund: Health and Welfare

Welfare Rental Assistance 84,114$ 84,114$ 20,205$ 63,909$

Total Rental Assistance Fund 84,114$ 84,114$ 20,205$ 63,909$

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County of Russel, Viginia Schedule 2

‘Schedule of Expenditures - Budget and Actual ge 3 of ‘Governmental Funds Forte Year Ended June 30,2011 Variance with Original and Element Budget ‘Actual (Negative ‘opment Planing and community development Panning Comission S 63500 § 6350 $ 48817 $16,588, (Community Development 83.205 83.205, 40044 (5.839) Conributon to Industial Development Aubry : 1058677 (1,058.77), Industrial Development 807317 597.317 449.908, 158.328 PSA Gontioutons - 345,000 (245,000) (CumberandPiateau 33.583 33.589 33.583, Regional Housing 14383, 14393 14393 Highway Safety Commission 2400 2400 1628 ™m CCanneres 16,608 128,904 101,192 ae Touism 70,365 70.35, 62202 813 Total planing and community development 33607 5 wae67 Sars SAT Enveenmental management: Sail and Water Conservation S325 $ aizs $3128 $ Cooperative extension program: PI Extension S230 $ ma $ 32280 § 40.001 Total community development S$ sov7g0 § 1o7z02 $ 2311048 $ (1.210.846) Nondepartenia Nndepartmetal 8 38 $1039 $ (103.820 Capital projects: Water projects s 8 $9387 $ (387) (ther capital projects 708 968 738.963, 953,195, (168,222) School projects - ST7.51 (577.651) “ota capital projects STRSTR SETS OTS (753270) Debt sence Principal payments S$ saigot § 1349018 $ 1798455 § (445430) Interest Expense 558.505 558.505, 740.901 (124.416) Total debt sence S_feor sat S907 52S 2s97.376_$ (628.856) Total General Fund S__ 27011299 §_z7p11z30$ 31002587 $ (4.081.348 Special Revenue Funds: Coal Road Fund: Public Works: Nantonance ofhighways, streets, bridges and sidewalks: Maintenance of highways, sees, bridges and sidewalks S 3000600 $ 3000600 $)aattT $8483 Vegiia coated 575,000 575,000, 54239 32651 “otal Publ Werks S__3575600§ 3575600 § __796466§ 2778134 Total Coal Road Fund 3575600 § 3575600 $ 796466 $ 270.104 Rental Assistance Fune: Health and Weare Wetare Rental Assistance S_suie § eaits $ 2005 $63.00 Total Rental Assistance Fund Sai § aartd $ 20205 $63,900

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Schedule 2 Page 4 of 4

Variance with Final Budget -

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2011

Fund, Function, Activity and Element

Special Revenue Funds: (Continued) Workforce Investment Board Fund: Health and Welfare

Welfare Workforce Investment 2,167,976$ 2,167,976$ 2,118,529$ 49,447$

Total Primary Government 32,838,929$ 32,838,929$ 34,027,787$ (1,188,858)$

Discretely Presented Component Unit - School Board: School Operating Fund: Education:

Administration of schools: Administration and health services 1,414,030$ 1,414,030$ 1,248,507$ 165,523$

Instruction costs: Instructional costs 29,229,858$ 30,343,940$ 29,139,082$ 1,204,858$
Technology 460,664 460,664 457,689 2,975

Total instruction costs 29,690,522$ 30,804,604$ 29,596,771$ 1,207,833$

Operating costs: Pupil transportation 2,743,486$ 2,743,486$ 2,459,017$ 284,469$
Operation and maintenance of school plant 7,085,137 7,085,137 4,810,588 2,274,549
Food service and non-instructional 1,901,947 1,901,947 1,978,033 (76,086)
Facilities 10,000 10,000 - 10,000

Total operating costs 11,740,570$ 11,740,570$ 9,247,638$ 2,492,932$

Total education 42,845,122$ 43,959,204$ 40,092,916$ 3,866,288$

Total School Fund 42,845,122$ 43,959,204$ 40,092,916$ 3,866,288$

Total Discretely Presented Component Unit - School Board 42,845,122$ 43,959,204$ 40,092,916$ 3,866,288$

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County of Russel, Viginia

Schedule 2

‘Schedule of Expenditures - Budget and Actual ge 4 of ‘Governmental Funds Forte Year Ended June 30,2011 Variance with Original Final und, Function, Activity and Element Budget ‘Actual (Negative Special Revenue Funds: (Continued) ‘Workforce Investment Board Fund: Health and Weare Weare Wiorkorce Investment 2iers76 § 267976 § _2itese9 § 49447 Total Primary Goverment s2g3e0n0 § 32008909 § Mcz7TeT$ _ (1108.65) Diserotaly Prosontod Component Unit - School Board: School Operating Fund: Eaton ‘Admiistaton of schoo’ ‘Adminsvation and heath servis 1aigos0 $ 1414000 $__1.24as07 $165,523 Instruction cots: Instructional costs zaz9e58 $§ © s0H3940 $ 25,9908 $ 1204858, Tectnology 60.864 260.664 457.689, 2975 Total instucton costs Paewesee S — Soaoseos SF Pasw6.TT S078 Operating costs: Puplranspotation 213486 § 2743488 $ 245017 $784,469 Operation and maintenance of school plant 7086.157 708697 4810588 2274 549 Food sence and non instucteral 41901947 ‘901s? 1.973.039, (75.086) Flies 40.000, 101000 10.000 “ota operating costs T740.570_S 17405703 BaTeRS SDS Tota education 42845122 § 43950204 $ 4a0enate $ 3.086.288 “otal School Fund 42845122 § 43950204 $ 4000916 $ _9086.288 “ota Discretely Presentd Component Unit - School Board 42845122 § 43950204 $ 4000716 $ —3.086.208

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Other Statistical Section

Table 1

General Parks, Interest Fiscal Government Judicial Public Public Health and Recreation, Community on Long- Service Year Administration Administration Safety Works Welfare (2) Education and Cultural Development (3) Term Debt Authority Total

2010-11 1,691,031$ 2,112,758$ 5,091,612$ 4,003,987$ 8,592,042$ 5,681,243$ 563,123$ 3,191,256$ 756,064$ 423,945$ 32,107,061$
2009-10 1,828,631 2,219,866 4,234,145 5,549,934 6,070,091 5,897,486 560,735 1,491,257 728,202 434,552 29,014,899
2008-09 1,706,342 2,243,005 4,013,947 6,055,397 5,982,456 5,471,573 541,087 4,826,721 758,753 407,145 32,006,426
2007-08 1,411,595 2,070,008 4,025,383 5,386,506 5,395,294 4,508,131 433,946 5,549,375 827,965 388,949 29,997,152
2006-07 1,465,480 1,710,751 3,667,580 2,867,007 4,880,408 3,884,301 477,515 3,246,100 852,493 422,425 23,474,060

(1) Information has only been available for 5 years. (2) 2010-2011 is the first year the Workforce Investment Board is included. (3) In 2010-2011 the County paid $1,508,677 towards the IDA debt.

County of Russell, Virginia

Last Ten Fiscal Years (1) Government-Wide Expenses by Function

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Tablet County of Russel, Virginia Government. Wide Expenses by Function Last Ten Fiscal Years (1)

General Parts, Interest Fiscal Government dit Public Public Health and Recreaton, Community on Long Service

Year ___Adinisation Ainstation Safety Works Witare 2) Education and Cuitual_Development(3)TemDebt Authority Tota aot § 1601031 $ — 211275 S$ —HNIBTZ $ —Aons.BT $ BNO $ SABLA S$ 55128 $B 191.256 $ THRO $ —aaBOHE § §—-32,N07,061 2009610 11928.631 2219,866 42041455 549504 6070.03 507,406 s00738 1491257 Taaz2 444882 3.014809 200809 1.708.342 2248,005, 4orsee7 6.055367 5,982.56 5471573 51087 4.826721 758753 «407.145 32006426, 2007-08 1411 595 2070008, 4025283 5.86,506, 5996.294 4506,131 4318 §540.375, arses = 388.849 23.97, 152 206-07 11485.480, 1710,751 3887580 2.867.007 4380,408 3884 301 STT518 326,100 852493472425 23,474,060

(1) Information has ony been avaiable fo 5 years. (2) 2010-2011 she first year the Workforce Inestment Board i incded (@) In 20102011 the County paid $1, 508,677 towards te IDA debt

Table 2

Grants and Operating Capital Contributions

Charges Grants Grants General Other Unrestricted Not Restricted Fiscal for and and Property Local Investment to Specific Year Services Contributions Contributions Taxes Taxes (2) Earnings Miscellaneous Programs (2) Total

2010-11 337,064$ 10,635,876$ -$ 13,683,476$ 6,340,919$ 89,819$ 177,669$ 2,638,202$ 33,903,025$
2009-10 393,362 7,473,127 - 13,004,381 6,123,807 106,848 173,322 2,465,451 29,740,298
2008-09 481,092 7,376,521 - 12,889,357 7,779,265 153,807 346,880 1,771,674 30,798,596
2007-08 505,428 7,780,609 - 12,279,583 7,976,046 529,827 55,649 1,711,485 30,838,627
2006-07 527,092 8,235,960 802,191 13,239,976 5,467,574 808,979 252,756 1,881,802 31,216,330

(1) Information has only been available for 5 years. (2) 2009-10 is the first year State Communications tax is classified as grants and contributions not restricted to specific programs

County of Russell, Virginia Government-Wide Revenues

Last Ten Fiscal Years (1)

PROGRAM REVENUES GENERAL REVENUES

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Table 2 County of Russell, Virginia ‘Government-Wide Revenues Last Ten Fiscal Years (1)

PROGRAM REVENUES GENERAL REVENUES Grants and Operating Capital Contributions Charges Grants Grants General Other Unrestricted Not Restricted

Fiscal for and and Property Local Investment to Specific,

Year Services Contributions __Contributions Taxes Taxes (2) Eamings Miscellaneous _ Programs (2) Total 20-11 § 337,064 § 10,635,876 $ = $ 13683476 § 6.340.919 $ 89.819 $177,668 $ 2,638,202 $ 33,903,028 2009-10 393,362 1473,127 - 13,004,381 6,123,807 106,848 173,322 2,465,451 29,740,298 2008-09 481,092 7,376,521 - 12,889,357 1,779,265 153,807 346,880 4,771,674 30,798,596 2007-08 505,428 7,780,608 : 12,279,583 7,976,046 529,827 55,649 4,711,485 30,838,627 2006-07 527,092 8,235,960 802,191 13,230,976 5,467,574 808,979 252,756 4,881,802 31.216,330

(1) {formation has only been available for years (2) 2009-10 isthe first year State Communications taxis classified as grants and contributions not restricted to specific programs

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Table 3

General Parks, Fiscal Government Judicial Public Public Health and Recreation, Community Non- Debt Year Administration Administration Safety Works Welfare (3) Education (2) and Cultural Development (4) departmental Service Total

2010-11 1,712,850$ 2,106,641$ 5,226,797$ 4,102,279$ 8,662,052$ 40,273,694$ 556,723$ 2,311,048$ 103,820$ 2,537,376$ 67,593,280$
2009-10 1,837,926 2,213,724 4,100,376 5,491,432 6,906,934 41,066,362 497,417 1,557,445 9,095 2,504,631 66,185,342
2008-09 1,702,193 2,236,691 4,383,789 6,093,232 6,672,387 42,452,183 547,104 3,925,736 56,093 2,547,424 70,616,832
2007-08 1,745,817 2,070,455 4,057,495 5,083,514 5,398,035 39,724,130 433,946 5,549,375 45,503 2,669,081 66,777,351
2006-07 1,547,966 1,805,418 3,863,960 3,205,718 5,126,034 41,346,518 493,366 5,699,361 - 2,429,487 65,517,828
2005-06 1,810,230 1,814,649 4,022,185 3,605,915 5,003,511 39,574,345 438,198 7,653,814 - 2,546,073 66,468,920
2004-05 1,471,043 1,059,566 3,977,841 3,434,569 4,948,270 33,030,292 339,244 5,186,187 - 2,704,665 56,151,677
2003-04 1,216,960 957,320 3,585,934 3,100,508 4,893,329 33,016,616 367,686 2,843,672 - 2,497,309 52,479,334
2002-03 1,267,146 977,540 3,651,469 3,067,788 4,910,495 27,683,380 378,365 4,133,801 - 2,111,104 48,181,088
2001-02 1,365,932 1,017,492 3,635,861 2,699,858 4,968,406 27,361,431 479,313 3,648,003 - 3,353,899 48,530,195

(1) Includes General and Special Revenue funds of the Primary Government and its Discretely Presented Component Unit - School Board. Excludes Capital Projects. (2) Excludes contribution from Primary Government to Discretely Presented Component Unit - School Board. (3) 2010-2011 is the first year the Workforce Investment Board is included. (4) In 2010-2011 the County paid $1,508,677 towards the IDA debt.

County of Russell, Virginia General Governmental Expenditures by Function (1)

Last Ten Fiscal Years

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County of Russel, Virginia Goneral Governmental Expenditures by Function (1) Last Ten Fiscal Years

Tables

General Parks, Fiscal Goiermment sia Public Public Heath and Receaton, Community Non. Debt Year___Aéminisration __Admiistraton Safety Works Watere(3}___Educaon (2) ___and Gutral_Development (4) _deparimental____Senice Tota

201041 1712850 § 2106541 $ $2679 $ 4102279 $ 8 82052 $ —4O.TEGOH $ 555723 § 231104 $ 103820 $ SETAE $67 803.280 2009.10 1.887 928 2213,708 4100376 54914g2 6.06804 41066362 4g7 17 1887.45 909 2504.31 8,105.42 2008-08 11702,198 2236.69 4383,780, 098232 «g672.387 42452,183 SATO 825,736, 550082547428, Topt6832 2007-08 1745817 2070455, 4057495, soaaste 5996035 39724190 438.9485 54975, 45503 2.669081, 65,777.35 2006-07 11587966 11805418 3.853.960, 5205718 5.126038 41346518 495,385 5.690.361 2429487 65517828 2005-06 1.810.230 1814649 4022,185, sensats — 500astt 39574345 438,108 7.853.814 - 2546073 8.488920 2004-05, tari983 1056 588 397741 4948270 33080282 S30.264 5,186,187 = 2704865 58,151,677 2003.04 1.216.960 957.300, 3.58504 4,390,329 s0tee16 36708 ©2843 872 - 297,308 sara 2002-08, 1267.16 977 540 3.851.460, 4910495 271683380 «378.385 4.133801 = Bannioe 45,181,088 2001.02 1,986,992 017.492 3635.61 4,966,408 27361431 «4793133648008, 3388.99 48,500,195

(1) ncludes General and Special Revenue funds of the Primary Government ants Disretely Presented Component Unit- Scheel Board, Excludes Capital Project (2) Excludes contribution rom Primary Government to Diseretaly Presented Component Unit - School Bar

(3) 2010-2011 isthe first year the Workorce Investment Board is included.

(4) 2010-2011 the Cont paid $1,508,677 tard the IDA debt

Table 4

Revenue Permits, from the

General Other Privilege Fees, Fines Use of Charges Fiscal Property Local Regulatory and Money and for Recovered Inter- Year Taxes Taxes (3) Licenses Forfeitures Property Services Miscellaneous Costs governmental (2), (3) Total

2010-11 13,548,896$ 6,340,919$ 22,834$ 1,206$ 73,514$ 1,101,993$ 416,883$ 898,399$ 47,717,709$ 70,122,353$
2009-10 12,841,457 6,123,807 45,877 1,049 74,279 998,548 293,467 1,732,861 43,856,378 65,967,723
2008-09 12,540,392 7,779,265 39,662 1,168 117,983 1,148,414 643,861 1,884,165 45,438,632 69,593,542
2007-08 11,826,325 7,976,046 44,933 321 501,144 1,023,848 510,972 796,913 43,519,497 66,199,999
2006-07 11,566,874 6,869,060 144,452 7,547 794,365 1,122,223 289,980 276,806 48,149,588 69,220,895
2005-06 12,337,123 6,713,063 52,707 8,181 660,142 878,017 310,534 187,855 42,906,554 64,054,176
2004-05 12,204,466 5,981,937 35,700 9,430 231,701 755,446 192,958 266,232 38,060,020 57,737,890
2003-04 10,148,719 4,820,255 38,906 9,938 74,324 892,392 209,598 283,077 35,517,991 51,995,200
2002-03 10,025,380 4,785,938 45,294 19,552 89,715 764,203 209,160 145,776 36,381,448 52,466,466
2001-02 10,375,632 3,909,367 64,261 11,766 228,739 791,877 164,096 476,465 30,997,358 47,019,561

(1) Includes General and Special Revenue funds of the Primary Government and its Discretely Presented Component Unit - School Board. Excludes Capital Projects (2) Excludes contribution from Primary Government to Discretely Presented Component Unit - School Board (3) 2009-10 is the first year State Communications tax is classified as noncategorical state aid

County of Russell, Virginia General Governmental Revenues by Source (1)

Last Ten Fiscal Years

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County of Russel, Virginia General Governmental Revenues by Source (1)

Table 4

Last Ten Fiscal Years

Revenue

Permits, from the

General Other Priviege Fees, Fines Use of Charges Fiscal Property Local Regulatory and Money and for Recovered Inter Year Taxes Taxes (3) Licenses Forfetures ___ Property Services Miscellaneous ___Costs_governmental (2), (3) Total

2010-11 13548896 $ — 6§MOgI9 § 284 $ 1206 $ ©7354 $1,101,903 § 416883 § © g98.309 § =A 747,700 70,122,353, 2000-10 12,881,487 6,123,807 45877 41049 14279 998,548 203467 1,732,861, 43,856,378, 65,967,723, 2008-06, 12,540,392 1,779,288 39,682 1,168 417,983, 4,148,414 643,861 1,884,165 45,438,632 69,593 542 2007-08 11,826,328 7.976 046 44,933, 321 sod 1023,848 510,972, 796.913 43519497 66,199,099 2006-07 11,586,874 6,369,080 144,452 1547 794365 4,122,223 269,980 276806 48,149,588 69,220,895 2008-08 12337,128 6,713,083 52707 8,181 60,142 a7aoi7 310,534 167,885 42,906,554 64,054,176 2004-08, 12204488 5,981,937 35700 9.430 231,701 755,446, 192,988 266.282 34,060,020, 57737 890 2008-08 10,148,719 4,820,258 38,906 9.938 74324 892,392 209,598 283,077 35,517,991 51,995,200, 2002-08 10,025,380 4,785,938 45,294 19582 89715 764208, 209,160, 145,76 36,381,448, 52.466 466 2001-02 10,375,632 3,909,367 64,261 11,766 228,739 731877 164,096 476.465 30,997,358 47019561

(1) Includes General and Special Revenue funds ofthe Primary Government and its Discetaly Presented Component Unit - School Board. Excludes Capital Project (2) Excludes contrition fam Primary Government to Discretly Presented Component Unit- School Boare (@) 2009-10’ the fist year State Communications tax is classified as noncategoical state aid

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Table 5

Percent of Percent of Total Current Percent Delinquent Total Total Tax Outstanding Delinquent

Fiscal Tax Tax of Levy Tax Tax Collections Delinquent Taxes to Year Levy (1) Collections (1) Collected Collections (1) Collections to Tax Levy Taxes (1) Tax Levy

2010-11 14,682,949$ 13,329,182$ 90.78% 1,330,697$ 14,659,879$ 99.84% 3,847,456$ 26.20% 2009-10 14,169,807 13,774,932 97.21% 886,480 14,661,412 103.47% 3,624,318 25.58% 2008-09 14,091,178 13,212,582 93.76% 496,787 13,709,369 97.29% 3,506,132 24.88% 2007-08 13,784,900 12,618,969 91.54% 411,887 13,030,856 94.53% 3,234,367 23.46% 2006-07 12,104,262 8,435,607 69.69% 863,735 9,299,342 76.83% 1,628,182 13.45% 2005-06 11,360,623 11,118,399 97.87% 797,364 11,915,763 104.89% 1,854,243 16.32% 2004-05 10,576,870 9,740,619 92.09% 537,362 10,277,981 97.17% 1,849,194 17.48% 2003-04 9,070,812 8,274,805 91.22% 324,217 8,599,022 94.80% 1,772,141 19.54% 2002-03 8,989,461 8,106,975 90.18% 361,604 8,468,579 94.21% 1,853,569 20.62% 2001-02 9,760,635 8,957,849 91.78% 407,972 9,365,821 95.96% 1,481,506 15.18%

(1) Exclusive of penalties and interest.

County of Russell, Virginia Property Tax Levies and Collections

Last Ten Fiscal Years

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Table 5 County of Russell, Virginia Property Tax Levies and Collections Last Ten Fiscal Years

Percent of Percent of Total Current Percent Delinquent Total Total Tax Outstanding Delinquent Fiscal Tax Tax of Levy Tax Tax Collections Delinquent Taxes to Year Lew (1) Collections (1) Collected Collections (1) ___Calletions to Tax Lewy Taxes (1) Tax 2010-11 $ 14,682,949 $ 13,329,182 90.78% $ 1,390,697 § 14,659,879 99.84% $ 3,847,456 26.20% 2009-10 14,169,807 13,774,932 97.21% 886,480 14,061,412 103.47% 3,624,318 25.58% 2008-09 14,091,178 13,212,582 93.76% 496,787 13,709,369 97.29% 3,506,132 24.88% 2007-08 13,784,900 12,618,969 91.54% 411,887 13,030,856 94.53% 3,234,367 23.46% 2006-07 12,404,262 8,435,607 69.69% 863,735 9,209,342 76.83% 1,628,182 13.45% 2005-06 11,360,623 11,118,399 97.87% 797,364 11,915,763 104.89% 1,854,243 16.32% 2004-05 10,576,870 9,740,619 92.09% 537,362 10,277,981 97.17% 1,849,194 17.48% 2003-04 9,070,812 8,274,805, 91.22% 324,217 8,599,022 94.80% 4,772,141 19.54% 200203 8,989,461 8,106,975 90.18% 361,604 8,468,579 94.21% 1,853,569 20.62% 2001-02 9,760,635, 8,957,849 91.78% 407,972 9,365,821 95.96% 41,481,506 15.18%

(1) Exclusive of penates and intrest.

Table 6

Machinery Fiscal Real Personal and Merchant’s Mobile Public Year Estate (1) Property Tools Capital Homes Service (2) Total

2010-11 1,197,720,260$ 235,114,151$ 82,948,411$ 5,136,529$ 23,320,148$ 326,871,285$ 1,871,110,784$
2009-10 1,181,352,276 224,871,200 96,552,183 5,402,115 22,864,821 253,750,196 1,784,792,791
2008-09 1,153,488,246 239,254,757 93,960,621 5,501,882 23,139,220 234,196,018 1,749,540,744
2007-08 1,130,643,127 243,837,948 107,205,468 5,742,600 23,608,064 231,981,492 1,743,018,699
2006-07 931,095,586 152,418,744 99,124,678 4,954,226 23,802,666 199,922,460 1,411,318,360
2005-06 927,558,386 241,849,424 92,859,770 5,113,134 26,020,997 206,306,945 1,499,708,656
2004-05 905,496,746 220,786,936 102,287,891 4,160,621 24,774,536 222,627,640 1,480,134,370
2003-04 885,323,887 205,377,101 77,287,167 3,438,802 23,763,122 226,411,983 1,421,602,062
2002-03 842,179,548 114,427,984 78,930,645 3,051,245 24,231,179 226,477,438 1,289,298,039
2001-02 810,877,087 199,122,212 67,692,057 2,978,115 22,720,856 227,820,417 1,331,210,744

(1) Real estate is assessed at 100% of fair market value. (2) Assessed values are established by the State Corporation Commission-includes all property types.

County of Russell, Virginia Assessed Value of Taxable Property

Last Ten Fiscal Years

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Table 6

County of Russell, Vi

Assessed Value of Taxable Property Last Ten Fiscal Years

Machinery

Fiscal Real Personal and Merchant’s Mobile Public

Year Estate (1) Property Tools Capital Homes Service (2) Total 2010-11 $ — 1,197,720,260 $ 235,114,151 $ 82,948,411 $ 5,196,529 § 23,320,148 § 326,871,285 $ —1,871,110,784 2009-10 1,181,352,276 224,871,200 96,552,183 5,402,115 22,864,821 253,750,196 1,784,792,791 2008-09 1,153,488,246 239,254,757 93,960,621 5,501,882 23,139,220 234,196,018 1,749,540,744 2007-08 1,130,643,127 243,837,948 107,205,468 5,742,600 23,608,064 231,981,492 1,743,018,699 2006-07 991,095,586 152,418,744 99,124,678 4,954,226 23,802,666 199,922,460 1,411,318,360 2008-06 927,558,386 241,849,424 92,859,770 5,113,134 26,020,997 206,306,945 1,499,708,656 2004-05 905,496,746 220,786,936, 102,287,891 4,160,621 24,774,536 222,627,640 1,480,134,370 2003-04 885,323,887 205,377,101 17,287,167 3,438,802 23,763,122 226,411,983, 1,421,602,062 2002-03 842,179,548 114,427,984 78,930,645 3,051,245, 24,231,179 208,477,438 1,289,298,039 2001-02 810,877,087 199,122,212 67,892,057 2,978,115 22,720,856 227,820,417 41,331,210,744

(1) Real estate is assessed at 100% of fair market value. (2) Assessed values are established by the State Corporation Commission-includes all property types.

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Table 7

Fiscal Real Personal Machinery Merchant’s Mobile Year Estate Property & Tools Capital Homes

2010-11 $ 0.61 $ 1.65 $ 1.65 $ 0.65 $ 0.61
2009-10 0.61 1.65 1.65 0.65 0.61
2008-09 0.61 1.65 1.65 0.65 0.61

2007-08(3) 0.56/0.61 1.65 1.65 0.65 0.56
2006-07(2) 0.65/0.56 1.65 1.65 NA 0.64

2005-06 0.65 1.65 1.65 NA 0.64
2004-05 0.60 1.45 2.45 NA NA 2003-04 0.60 1.45 1.45 NA NA 2002-03 0.55 1.45 1.45 NA NA 2001-02 0.55 1.45 1.45 NA NA

(1) Per $100 of assessed value. (2) 2nd half 2006/1st half 2007 (3) 2nd half 2007/1st half 2008

County of Russell, Virginia Property Tax Rates (1) Last Ten Fiscal Years

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Table 7 County of Russell, Virgi Property Tax Rates (1) Last Ten Fiscal Years

Fiscal Real Personal Machinery Merchant’s Mobile Year Estate Property & Tools Capital Homes 200-11 $ O61 § 165 $ 165 $ 065 § 061 2009-10 061 1.65 1.65 0.65 O61 2008-09 061 1.65 1.65 0.65 061 2007-08(3) 0.5610.61 1.85 1.65 0.65 0.56 2006-07(2) 0.65/0.56 1.65 1.65 NA 0.64 2005-06 0.65 1.65 1.65 NA 0.64 2004-05 0.60 145 245 NA NA 2003-04 0.60 1.45 1.45 NA NA 2002-03 0.55 1.45 1.45 NA NA 2001-02 0.55 1.45 1.45 NA NA

(1) Per $100 of assessed value. (2) 2nd half 2006/1st half 2007 (3) 2nd half 2007/1st half 2008

Table 8

Ratio of Net Bonded Net

Assessed Gross Net Debt to Bonded Fiscal Value (in Bonded Bonded Assessed Debt per Year Population (1) thousands) (2) Debt (3) Debt Value Capita

2010-11 28,897 1,871,111$ 14,066,729$ 14,066,729$ 0.75% 487$
2009-10 28,790 1,784,793 15,315,245 15,315,245 0.86% 532
2008-09 28,790 1,749,541 14,878,819 14,878,819 0.85% 517
2007-08 28,790 1,743,019 14,584,265 14,584,265 0.84% 507
2006-07 28,790 1,411,318 14,836,861 14,836,861 1.05% 515
2005-06 28,790 1,499,709 12,594,094 12,594,094 0.84% 437
2004-05 28,830 1,480,134 13,633,304 13,633,304 0.92% 473
2003-04 28,795 1,421,602 14,670,561 14,670,561 1.03% 509
2002-03 28,940 1,289,298 15,770,006 15,770,006 1.22% 545
2001-02 28,944 1,331,211 12,408,937 12,408,937 0.93% 429

(1) Bureau of the Census (2) Real property assessed at 100% of the fair market value (3) Includes all long-term general obligation bonded debt, bonded anticipation notes, and literary fund loans Excludes revenue bonds, landfill closure/post-closure care liability, capital leases, and compensated absences

County of Russell, Virginia Ratio of Net General Bonded Debt to

Last Ten Fiscal Years Assessed Value and Net Bonded Debt Per Capita

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Table 8 County of Russell, Virginia Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years

Ratio of Net Bonded Net

Assessed Gross Net Debt to Bonded

Fiscal Value (in Bonded Bonded Assessed Debt per

Year Population (1) thousands) (2) Debt (3) Debt Value Capita 2010-11 20897 $ 1,871,111 $ 14,066,729 $ 14,066,729, 075% 487 2009-10 28,790 4,784,793 15,315,245 15,315,245 0.86% 532 2008-09 28,790 4,749,541 14,878,819 14,878,819 0.85% 5t7 2007-08, 28,790 1.743.019 14,584,265 14,584,265 0.84% 507 2006-07 28,790 4411318 14,836,861 14,836,861 1.05% 515 2005-06 28,790 4,499,708 12,594,094 12,594,094 0.84% 437 2004-05 28,830 1,480,134 13,683,304 13,693,304 0.92% 473 2003-04 28,795 4,421,602 14,670,561 14,670,561 1.03% 509 2002-03, 28,940 4,289,298 18,770,006 18,770,006 1.22% 545 2001-02 28,944 4,331,211 12,408,937 12,408,937 0.93% 429

(1) Bureau of the Census

(2) Real property assessed at 100% of the fair market value

(3) Includes all long-term general obligation bonded debt, bonded anticipation notes, and literary fund loans Excludes revenue bonds, landfill closurelpostclosure care lably, capital leases, and compensated absences

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Table 9

Ratio of Total Debt Service

Total General to General Fiscal Debt Governmental Governmental Year Service Expenditures Expenditures

2010-11 2,537,376$ 67,593,280$ 3.75% 2009-10 2,504,631 66,185,342 3.78% 2008-09 2,547,424 70,616,832 3.61% 2007-08 2,669,081 66,777,351 4.00% 2006-07 2,429,487 65,517,828 3.71% 2005-06 2,546,073 66,468,920 3.83% 2004-05 1,775,036 56,151,677 3.16% 2003-04 1,742,481 52,479,334 3.32% 2002-03 1,658,923 48,181,088 3.44% 2001-02 1,939,714 48,530,195 4.00%

(1) Includes all governmental funds of the Primary Government and funds of the Discretely Presented Component Unit-School Board.

County of Russell, Virginia Ratio of Annual Debt Service Expenditures for General Bonded

Debt to Total General Governmental Expenditures (1) Last Ten Fiscal Years

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Table 9 County of Russell, Virginia Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures (1) Last Ten Fiscal Years

Ratio of Total Debt Service Total General to General

Fiscal Debt Governmental Governmental

Year Service Expenditures Expenditures 2010-11 $ 257,376 $ 67,593,280 3.75% 2009-10 2,504,631 66,185,342 3.78% 2008-09 2,547 424 70,616,832 3.61% 2007-08 2,669,081 66,777,351 4.00% 2006-07 2,429,487 65,517,828 3.71% 2005-06 2,546,073, 66,468,920 3.83%. 2004-05 41,775,036 56,151,677 3.16% 2003-04 1,742,481 52,479,334 3.32% 2002-03 1,658,923 48,181,088 3.44% 2001-02 1,939,714 48,530,195 4.00%

(1) Includes all governmental funds ofthe Primary Government and funds ofthe Discretely Presented Component Unit-School Board.

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COMPLIANCE SECTION

ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Members of the Board of Supervisors County of Russell, Virginia Lebanon, Virginia

We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Russell, Virginia, as of and for the year ended June 30, 2011, which collectively comprise the County of Russell, Virginia’s basic financial statements and have issued our report thereon dated November 22, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the County of Russell, Virginia’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County of Russell, Virginia’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County of Russell, Virginia’s internal control over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying schedule of findings, responses, and questioned costs, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies 2011-1 and 2011-2 described in the accompanying schedule of findings, responses, and questioned costs to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the County of Russell, Virginia’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests

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ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS 1 PROFESIONAL LIMITED LIABILITY COMPANY

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN ‘AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Members of the Board of Supervisors County of Russell, Virgi Lebanon, Virginia

We have audited the financial statements of the governmental activities, the business-type activites, the discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Russell, Virginia, as of and for the year ended June 30, 2011, which collectively comprise the County of Russell, Virginia’s basic financial statements and have issued our report thereon dated November 22, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the County of Russell, Virginia’s intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County of Russell, Virginia’s internal control over financial reporting, Accordingly, we do not express an opinion on the effectiveness of the County of Russell, Virginia’s internal control over financial reporting

AA deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibilty that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies 2011-1 and 2011-2 described in the accompanying schedule of findings, responses, and questioned costs to be material weaknesses.

Compliance and Other Matters

‘As part of obtaining reasonable assurance about whether the County of Russell, Virginia’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests

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disclosed an instance of noncompliance or another matter that is required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings, responses, and questioned costs as item 2011-3.

We noted certain matters that we reported to management of the County of Russell, Virginia, in a separate letter dated November 22, 2011.

The County of Russell, Virginia’s responses to the findings identified in our audit are described in the accompanying schedule of findings, responses, and questioned costs. We did not audit the County of Russell, Virginia’s responses and, accordingly, we express no opinion on them.

This report is intended solely for the information and use of management, the Board of Supervisors, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Blacksburg, Virginia November 22, 2011

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We noted certain matters that we reported to management of the County of Russell, Virginia, in a separate letter dated November 22, 2011

Halisinaon, Samar, le, Ussocicites-

Blacksburg, Virginia November 22, 2011

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ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY

Independent Auditors’ Report on Compliance with Requirements That
Could Have a Direct and Material Effect on Each Major Program and on

Internal Control Over Compliance in Accordance with OMB Circular A-133

To the Board of Supervisors County of Russell, Virginia Lebanon, Virginia

Compliance

We have audited the County of Russell, Virginia’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the County of Russell, Virginia’s major federal programs for the year ended June 30, 2011. The County of Russell, Virginia’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings, responses, and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the County of Russell, Virginia’s management. Our responsibility is to express an opinion on the County of Russell, Virginia’s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the County of Russell, Virginia’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the County of Russell, Virginia’s compliance with those requirements.

As described in item 2011-5 in the accompanying schedule of findings, responses, and questioned costs, the County of Russell, Virginia did not comply with requirements regarding allowable costs that are applicable to its Twenty-first Century Community Learning Center Funds. Compliance with such requirements is necessary, in our opinion, for the County of Russell, Virginia to comply with the requirements applicable to that program.

As described in item 2011-6 in the accompanying schedule of findings, responses and questioned costs, the County of Russell, Virginia did not comply with requirements regarding Davis Bacon Act that are applicable to its ARRA – State Fiscal Stabilization Funds. Compliance with such requirements is necessary, in our opinion, for the County of Russell, Virginia to comply with the requirements applicable to that program.

In our opinion, except for the noncompliance described in the preceding paragraphs, the County of Russell, Virginia complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2011.

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ROBINSON, FARMER, COX ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS 1 PROFESIONAL LIMITED LIABILITY COMPANY

Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133

To the Board of Supervisors County of Russell, Virginia Lebanon, Virginia

Compliance

We have audited the County of Russell, Virginia’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the County of Russell, Virginia’s major federal programs for the year ended June 30, 2011. The County of Russell, Virginia’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings, responses, and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each ofits major federal programs is the responsibilty of the County of Russell, Virginia’s management. Our responsibilty is to express an opinion on the County of Russell, Virginia’s compliance based on our audit.

‘As described in item 2011-5 in the accompanying schedule of findings, responses, and questioned costs, the County of Russell, Virginia did not comply with requirements regarding allowable costs that are applicable to its Twenty-first Century Community Learning Center Funds. Compliance with such requirements is necessary, in our opinion, for the County of Russell, Virginia to comply with the requirements applicable to that program.

‘As described in item 2011-6 in the accompanying schedule of findings, responses and questioned costs, the County of Russell, Virginia did not comply with requirements regarding Davis Bacon Act that are applicable to its ‘ARRA — State Fiscal Stabilization Funds. Compliance with such requirements is necessary, in our opinion, for the County of Russell, Virginia to comply with the requirements applicable to that program,

In our opinion, except for the noncompliance described in the preceding paragraphs, the County of Russell, Virginia

complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2011

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Internal Control Over Compliance

Management of the County of Russell, Virginia is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the County of Russell, Virginia’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County of Russell, Virginia’s internal control over compliance.

Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.
We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2011-5 and 2011-6 to be material weaknesses.

Blacksburg, Virginia November 22, 2011

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Internal Control Over Compliance

Management of the County of Russell, Virginia is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the County of Russell, Virginia’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report cn internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of intemal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County of Russell, Virginia’s internal control over compliance.

Our consideration of intemal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in intemal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses

A deficiency in intemal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. ‘A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possiblity that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2011-5 and 2011-6 to be material weaknesses

Haleimoen, Sherer, leg Lhsocidter- Blacksburg, Virginia November 22, 2011

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Page 1 of 4

Pass-through Federal Entity

Federal Grantor/State Pass - Through Grantor/ CFDA Identifying Federal Program Cluster or Title Number Number Expenditures

Department of Health and Human Services: Pass Through Payments: Department of Social Services: Promoting Safe and Stable Families 93.556 0950110, 0950111 23,420$
Temporary Assistance for Needy Families (TANF) 93.558 0400110, 0400111 602,769
Refugee and Entrant Assistance - State Administered Programs 93.566 0500110, 0500111 598
Low-Income Home Energy Assistance 93.568 0600410, 0600411 27,514
Child Care and Development Fund Cluster: Child Care and Development Block Grant 93.575 0770110 21,771
ARRA - Child Care and Development Block Grant 93.713 0740109 3,048
Child Care Mandatory and Matching Funds of the 93.596 0760110, 0760111 78,269
Child Care and Development Fund Child Welfare Services - State Grants 93.645 0900110, 0900111 1,559
Foster Care - Title IV-E 93.658 1100110, 1100111 438,270
ARRA - Foster Care - Title IV-E 93.658 1100110, 1100111 22,612
Foster Care - Title IV-E Subtotal 93.658 460,882

  Adoption Assistance 93.659 1120110, 1120111 118,318              
  ARRA - Adoption Assistance 93.659 1120110, 1120111 6,501                  
  Adoption Assistance Subtotal 93.659 124,819              

  Social Services Block Grant 93.667 1000110, 1000111 296,107              
  Chafee Foster Care Independence Program 93.674 9150110, 9150111 12,232                
  Children's Health Insurance Program 93.767 0540110, 0540111 9,527                  
  Medical Assistance Program 93.778 1200110, 1200111 193,638

Total Department of Health and Human Services 1,856,153$

Department of Agriculture: Direct Payments: ARRA - Emergency Watershed Protection Program 10.923 Not applicable 7,514$

Pass Through Payments: Department of Agriculture: Child Nutrition Cluster: Food Distribution-Schools (Note 3) 10.555 Not applicable 126,265$

Department of Education:
  Child Nutrition Cluster:
      National School Lunch Program 10.555 40623 873,923              
      National School Lunch Program Subtotal 1,000,188$        

Department of Education:
  Child Nutrition Cluster:
      National School Breakfast Program 10.553 40591 300,481              
  Fresh Fruit and Vegetable Program 10.582 40599 19,208                

Department of Social Services:
      State Administrative Matching Grants for the Supplemental 10.561 0010110, 0010111 325,129$            
          Nutrition Assistance Program 0040110, 0040111
      ARRA - State Administrative Matching Grants for the Supplemental 10.561 0010110, 0010111 3,235                  
          Nutrition Assistance Program 0040110, 0040111
      State Administrative Matching Grants for the Supplemental 10.561 328,364$            
          Nutrition Assistance Program Subtotal

County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2011

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County of Russel, Virginia Page 1 of 4 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2011 Pass-through Federal Entity Federal GrantoriState Pass - Through Grantor! CFDA Identifying Federal Program Cluster or Title Number Number Expenditures Department of Heath and Human Services: ass Through Payments: Department of Social Senices Promoting Safe and Stable Families 93.556 ossotto,o9s0r11 $23,420 Temporary Assistance for Needy Families (TANF) 93.558 ‘0400110, 0400111 602,768 Refugee and Entrant Assistance - Stale Administered Programs 93.566 ‘0500110, 0500111 598 Low-income Home Energy Assistance 93.568 ‘0600410, 0600411 amt Child Care and Development Fund Cluster: Child Care and Development Block Grant 93575 or70110 amt ARRA - Child Care and Development Block Grant 93713 740109 3.048 Child Care Mandatory and Matching Funds ofthe 93.596 760110, 0760111 78,269 Child Care and Development Fund Child Wetfare Services - State Grants 93.645 ‘0900110, 0900111 1,559 Foster Care - Tie V-E 93.658 1100110, 1100111 438,270 |ARRA - Foster Care - Tie IV-E 93.658 1100110, 1100111 22612 Foster Care - Tie IV-E Subtota 93.658 460,862 ‘Adoption Assistance 93.659 1120110, 120111 118318 RRA - Adoption Assistance 93.659 1120110, 1120111 6.501 ‘Adoption Assistance Subtotal 93.659 724819 Social Services Block Grant 93.667 1000110, 1000111 296,107 Chafee Foster Care Independence Program 93674 9150110, 9150111 12,232 Children’s Heath Insurance Program 93767 (0540110, 0540111 927 Medical Assistance Program 9378 1200110, 1200111 ‘otal Department of Heath and Human Services Department of Agriculture: Direct Payments |ARRA - Emergency Watershed Protection Program 10.923, No applicable A 7514 ass Through Payments: Department of Agriculture: Child Nutrition Cluster Food Distribution Schools (Note 3) 10.855 Not applicable $126,265

Department of Education: Child Nutrition Cluster: ‘National School Lunch Program 10555, 40628 National School Lunch Program Subtotal

Department of Education: Child Nutrition Cluster

National School Breakfast Program 10553, 40591 Fresh Fruit and Vegetable Program 10582 40599 Department of Socal Senices: ‘Stale Administrative Matching Grans forthe Supplementa 10561 ‘010110, oot0111 Nuition Assistance Program ‘oo4ott0, 0040111 ARRA.- State Administrative Matching Grants forthe Supplementa 10561 ot0110, 0010111 'Nuiton Assistance Program ‘oo4ott0, 0040111 Stale Administrative Matching Grans forthe Supplementa 10561 "Nuttin Assistance Program Subtota

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300,481, 19,208

$325,129

3.235

Page 2 of 4County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2011

Pass-through Federal Entity

Federal Grantor/State Pass - Through Grantor/ CFDA Identifying Federal Program Cluster or Title Number Number Expenditures

Department of Agriculture: (Continued) Pass Through Payments: (Continued) Total Department of Agriculture - pass-through payments 1,648,241

Total Department of Agriculture 1,655,755$

Department of Justice: Pass Through Payments: Department of Criminal Justice Services: Violence Against Women Formula Grants 16.588 09WFAX0037 38,550$

10WFAX0041 ARRA - Stop Violence Against Women Formula Grants 16.588 09EFS60025 18,061

Total Department of Justice 56,611$

Department of Transportation: Pass Through Payments: Department of Motor Vehicles: State and Community Highway Safety (402 Funds) 20.600 AL-2010 50321 3941 17,186$

SC-2011 51346 4288

Total Department of Transportation 17,186$

Department of Education: Pass Through Payments: Department of Education: Adult Education - Basic Grants to States 84.002 42801 299,213$
Title I Cluster: Title I: Grants to Local Educational Agencies 84.010 42901 1,180,478
ARRA - Title I: Grants to Local Educational Agencies 84.389 42913 508,916
Special Education Cluster: Special Education - Grants to States 84.027 43071 728,381
ARRA - Special Education - Grants to States 84.391 61245 501,942
Special Education - Preschool Grants 84.173 62521 35,822
Career and Technical Education: Basic Grants to States 84.048 61095 97,462
Safe and Drug Free Schools and Communities - State Grants 84.186 60511 22,739
Even Start - State Educational Agencies 84.213 42950, 86603 316,196
Twenty-First Century Community Learning Centers 84.287 60565 1,196,134
Education Technology State Grants Cluster: Education Technology State Grants 84.318 61600 21,488
ARRA - Education Technology State Grants 84.386 60897 14,818
Rural Education 84.358 43481 90,774
ARRA - State Fiscal Stabilization Funds - Education State Grants 84.394 62532 2,164,135
Education Jobs Funds 84.410 62700 1,049,862
Improving Teacher Quality State Grants 84.367 61480 254,725

Total Department of Education 8,483,085$

Department of Housing and Urban Development: Pass Through Payments: Department of Housing and Community Development: Community Development Block Grant 14.228 50799 100,846$

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County of Russell, Virginia Page 2 of 4 Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2011 Pass-through Federal Entity Federal GrantoriState Pass - Through Grantori CFDA Identifying Federal Program Cluster or Title Number ‘Number Expenditu Department of Agriculture: (Continued) ass Through Payments: (Continued) ‘Total Department of Agriculture - pass-through payments ‘otal Department of Agriculture $1,655,755 Department of Justie: Pass Through Payments: Department of Criminal Justoe Services: Vielence Against Women Formula Grants 16.588 oswFAxo037 $38,550 1OWFAKOO4T ARRA.- Stop Violence Against Women Formula Grants 16.588 oseFs60025

‘otal Department of Justice

Department of Transportation: ass Through Payments: Department of Motor Vehicles: State and Community Highway Safety (402 Funds) 20600 AL-2010 50321 3041 $17,186 SC-2011 51346 4288

‘Total Department of Transportation

Department of Education: ass Through Payments: Department of Education:

‘Adult Education - Basic Grants to States 84.002 42801 S$ 299213

Title | Custer:

Title |: Grants to Local Educational Agencies 84010 42001 1.180478

|ARRA Title I: Grants to Local Educational Agencies 84389 42913 508.916 Special Education Cluster:

‘Special Education - Grants to States 8a0o7 «sort 728,381,

ARRA.- Special Education - Grants to States 84391 61245 501,942

Special Education - Preschool Grants 84173 62521 35,822 Career and Technical Education: Basic Grants to States 84048 61095 97462 Safe and Drug Free Schools and Communes - State Grants 84.186 60511 22739 Even Start - Siate Educational Agencies 84213 42960, 86603, 316,196 ‘Twenty-First Century Community Leaming Centers 84287 60565 4,196,134 Education Technology State Granis Cluster:

Education Technology State Grants 84318 61600 21488

ARRA.- Education Technology State Grants 84386 60897 14818 Rural Education 84358 43481 90,774 ARRA State Fiscal Stabilization Funds - Education State Grants 84308 62832 2,164,135 Education Jobs Funds 84410 62700 11049862 Improving Teacher Quality State Grants 84367 61480 254,725

‘otal Department of Education S$ 6483,085

Department of Housing and Urban Development ass Through Payments: Department of Housing and Community Development ‘Community Development Block Grant 14.208 50799

Page 3 of 4County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2011

Pass-through Federal Entity

Federal Grantor/State Pass - Through Grantor/ CFDA Identifying Federal Program Cluster or Title Number Number Expenditures

Corporation for National Community Service: Pass Through Payments: Department of Education: Learn and Serve America - School and Community Based Programs 94.004 60185 20,442$

Department of Labor: Pass Through Payments: Virginia Community College System: Workforce Investment Act Cluster: WIA Adult Program 17.258 53427 392,777$
ARRA - WIA Adult Program 17.258 53427 310,728
WIA Adult Program Subtotal 17.258 703,505

      WIA Youth Activities 17.259 53427 508,992              
      ARRA - WIA Youth Activities 17.259 53427 364,322              
      WIA Youth Activities Subtotal 17.259 873,314              

      WIA Dislocated Workers 17.260 53427 231,765              
      ARRA - WIA Dislocated Workers 17.260 53427 265,169              
      WIA Dislocated Workers Subtotal 17.260 496,934

Total Department of Labor 2,073,753$

U.S. Department of Homeland Security: Pass Through Payments: Department of Emergency Management: State Homeland Security Program (SHSP) 97.073 52707 19,770$
Emergency Management Performance Grant 97.042 52740, 146 68,535

Total U.S. Department of Homeland Security 88,305$

Total Expenditures of Federal Awards 14,352,136$

Note 1 – Basis of Presentation

Note 2 – Summary of Significant Accounting Policies

Note 3 – Food Distribution Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed. At June 30, 2011 Russell County, Virginia had food commodities totaling $0 in inventory.

(1) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , wherein certain types of expenditures are not allowable or are limited as to reimbursement.

The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Russell County, Virginia under programs of the federal government for the year ended June 30, 2011. The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations . Because the Schedule presents only a selected portion of the operations of Russell County, Virginia, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Russell County, Virginia.

(2) Pass-through entity identifying numbers are presented where available.

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County of Russel, Virginia Page 3 of 4 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2011 Pass-through Federal Entity Federal GrantoriState Pass - Through Grantori CFDA Identifying Federal Program Cluster or Title Number ‘Number Expenditures Corporation for National Community Senvioe ass Through Payments: Department of Education: Learn and Serve America - School and Community Based Programs 94.008 cates S042 Department of Labor: ass Through Payments: Virginia Community Colege System: Workforce Investment Act Cluster: WIA Adut Progra 17.258 53427 8 3e27TT ARRA.- WIA Adult Progrart 17.258 53427 310,728 WIA Adut Program Subtota 17.258 708,505 WIA Youth Activites 17.259 53427 508,992 ARRA WIA Youth Activites 17.259 53427 3645322 WIA Youth Activities Subtota 17.259 873,314 WIA Distocated Workers 17.280 53427 231,765 ARRA - WIA Dislocated Workers 17.280 53427 WIA Dislocated Workers Subtotal 17.280 ‘otal Department of Labor A U.S. Department of Homeland Security: ass Through Payments: Department of Emergency Management State Homeland Security Program (SHSP) 97073 52707 8 Emergency Management Performance Grant 97.042 52740, 146

‘otal U.S. Department of Homeland Security Total Expenditures of Federal Awards

Note 1 ~ Basis of Presentation

‘The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Russell County, Viginia under programs ofthe federal government for the year ended June 30, 2011. The information in this Schedule is presented in accordance with the requirements of OMB

Circular A-133, Audits of States, Local Governments, and Non-Proft Organizations

Because the Schedule presents only a selected portion of the

‘operations of Russell County, Virginia, i is not intended to and does not present the financial position, changes in net assets, or cash flows of Russell

County, Virginia,

Note 2~ Summary of Significant Accounting Poicies

(1) Expenditures reported on the Schedule are reported on the accrual basis of accounting, Such expenditures ae recognized following the cost principles contained in OMB Circular A-87, Cost Princoles for Stte, Loca, and Indian Tibal Governments, wherein certain lypes of expenditures are nt allowable or

ate limited as to reimbursement.

(2) Pass-through entity identifying numbers are presented where availble.

Note 3 ~ Food Distribution

Nonmonetary assistance is reported inthe schedule a the fair marke value ofthe commodities received and disbursed, At June 30, 2011 Russell County

Virginia had food commodities totaling $0 in inventory

Page 4 of 4County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2011

Note 4 – Subrecipients Of the federal expenditures presented in the Schedule, Russell County, Virginia provided federal awards to subrecipients as follows: CFDA Number Program Name Amount 14.228 Community Development Block Grant 168,820$
17.258, 17.259, 17.260 Workforce Investment Act Cluster 1,035,313

Note 5 – Relationship to the Financial Statements Federal expenditures, revenues and capital contributions are reported in the County’s basic financial statements as follows:

Intergovernmental federal revenues per the basic financial statements: Primary government: General Fund 2,454,979$
Workforce Investment Board Fund 2,073,753

Total primary government: 4,528,732$        

Component Unit Schools:
  School Operating Fund 9,823,404$

Total federal expenditures per the Schedule of Expenditures of Federal Awards 14,352,136$

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County of Russel, Virginia Page 4 of 4 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2011

Note 4 ~ Subrecipints, Of the federal expenditures presented in the Schedule, Russel County, Virginia provided federal awards o subrecipients 2s follows:

CFDA Number Program Name ‘Amount 14.228 Community Development Block Gran $168,820 17.258, 17.259, 17-260 Workforce Investment Act Cluster 1,035,313

Note 5 ~ Relationship othe Financial Statements Federal expenditures, revenues and capital contributions are reported in the County’s basic financial statements as follows:

Intergovernmental federal revenues per the basic financial statements:

Primary government General Fund $ 2454979 Workforce Investment Board Fund 073,753 Total primary goverment 528,732 Component Unit Schools:

School Operating Fund 23,404

Toa federal expenditures per the Schedule of Expenditures of Federal Awards $14,352,196

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County of Russell, Virginia

Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section I - Summary of Auditor’s Results

Financial Statements

Type of auditor’s report issued: Unqualified

Internal control over financial reporting: Material weakness(es) identified? Yes

Significant deficiency(ies) identified? No

Noncompliance material to financial statements noted? Yes

Federal Awards

Internal control over financial reporting: Material weakness(es) identified? Yes

Significant deficiency(ies) identified? No

Type of auditor’s report issued on compliance for major programs Qualified

Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510 (a)? Yes

Identification of major programs:

CFDA # Name of Federal Program or Cluster

84.173/84.027/84.391 Special Education Cluster 84.010/84.389 Title I: Part A Cluster

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Cluste 93.667 Social Services Block Grant 84.410 Education Jobs Funds 84.394 ARRA - State Fiscal Stabilization Funds - Education State Grants 84.287 Twenty-first Century Community Learning Centers

17.258/17.259/17.260 Workforce Investment Act Cluster

Dollar threshold used to distinguish between Type A and Type B programs: $430,564

Auditee qualified as low-risk auditee? No

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County of Russell, Vit

‘Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section | - Summary of Auditor’s Results

Financial Statements ‘Type of auditor’s report issued: Unqualified Internal control over financial reporting Material weakness(es) identified’ Yes Significant defciency(ies) identified? No Noncompliance material to financial statements noted’ Yes Federal Awards Internal control over financial reporting Material weakness(es) identified’ Yes Significant defciency(ies) identified? No ‘Type of aucitor’s report issued on compliance for major programs Qualified ‘Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510 (a)? Yes Identification of major programs CEDA# Name of Federal Program or Cluster 84.173/84.027/84.391 Special Education Cluster 84.010/84.389 Title: Part A Cluster 10.561 State Administrative Matching Grants forthe Supplemental Nutrition Assistance Program Cluste 93.667 Social Services Block Gran! 84.410 Education Jobs Funds 84.304 ARRA - State Fiscal Stabilization Funds - Education State Grants 84.287 Twenty-first Century Community Learning Centers 17.258/17.259/17.260 Workforce Investment Act Clustet Dollar threshold used to distinguish between Type A and Type B programs: $430,564 Auditee qualified as low-risk auditee? No

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County of Russell, Virginia

Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section II - Financial Statement Findings

2011-1

Criteria:

Condition:

Cause of Condition:

Effect of Condition:

Recommendation:

Management’s
Response:

2011-2

Criteria:

Condition:

Cause of Condition:

Effect of Condition:

Recommendation:

Management’s
Response:

The financial statements, as presented for audit, did not contain all necessary adjustments to comply with generally accepted accounting principles (GAAP). As such, the auditor proposed adjustments that were material to the financial statements.

The County does not have proper controls in place to detect and correct errors in closing their year end financial statements.

There is more than a remote likelihood that a misstatement of the County’s financial statements that is more than inconsequential will not be prevented or detected by the County’s internal controls over financial reporting.

The County will review the auditors’ proposed audit adjustments for 2011 and will develop a plan of action to ensure that all adjusting entries are made prior to final audit fieldwork next year.

A key concept of internal controls is the segregation of duties. No one employee should have access to both accounting records and related assets.

The School Board lacks proper segregation of duties over payroll.

The School Board lacks the funding to fully support a completely segregated finance department.

Management should further try to segregate duties amongst current staff to help alleviate risk created by improper segregation of duties.

Per Statement on Auditing Standards 115 (SAS 115), identification of a material adjustment to the financial statements that was not detected by the entity’s internal controls indicates that a material weakness exists.

The County should review the auditors’ proposed audit adjustments for 2011 and develop a plan to ensure the trial balances and related schedules are accurately presented for audit.

Management acknowledges that internal controls over School Board payroll lacks proper segregation of duties, however to alleviate same would require additional staff. Due to cost constraints, the School Board has decided not to address the aforementioned internal control deficiency.

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County of Russell, Vit

‘Schedule of Findings, Responses and Questioned Costs

Year Ended June 30, 2011

Section ll - Financial Statement Findings

2011-4

Criteria

Condition:

Cause of Condition

Effect of Condition:

Recommendation:

Management’s Response:

2011-2

The financial statements, as presented for audit, did not contain all necessary adjustments to ‘comply with generally accepted accounting principles (GAAP). As such, the auditor proposed agjustments that were material tothe financial statements.

The County does not have proper controls in place to detect and correct errors in closing their year end financial statements.

‘There is more than a remote likelihood that a misstatement of the County’s financial statements tha is more than inconsequential will not be prevented or detected by the County’s intemal controls over financial reporting

‘The County should review the auditors’ proposed aucit adjustments for 2011 and develop a plan to ensure the tral balances and related schedules are accurately presented for audit

The County will review the auditors’ proposed audit adjustments for 2011 and will develop a plan of action to ensure that all adjusting entries are made prior to final audit fldwork next year.

Criteria

Condition:

Cause of Condition:

Effect of Condition:

Recommendation:

Management’s Response:

‘A key concept of intemal controls is the segregation of duties. No one employee should have ‘access to both accounting records and related assets.

‘The School Board lacks proper segregation of duties over payroll.

The School Board lacks the funding to fully support a completely segregated finance department.

There is more than a remote likelihood that a misstatement of the County’s financial statements tha is more than inconsequential will not be prevented or detected by the County’s intemal controls over financial reporting

Management should further try to segregate duties amongst current staff to help alleviate risk created by improper segregation of duties.

Management acknowiedges that intemal controls over School Board payroll lacks proper segregation of duties, however to alleviate same would require additional staff, Due to cost constraints, the School Board has decided not to address the aforementioned internal control deficiency.

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County of Russell, Virginia

Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section II - Financial Statement Findings (continued) 2011-3

Criteria:

Condition:

Cause of Condition:

Effect of Condition:

Recommendation:

Management’s
Response:

2011-4

Criteria:

Condition:

Context:

Cause of Condition:

Effect of Condition:

Recommendation:

Management’s
Response:

The County has never posted supplemental appropriations to the accounting system.

The IDA Debt Reduction Fund, VPA Expenditures Fund, Cannery Fund, and Employee Health Insurance Fund overspent the budget. Numerous departments within the General fund also overspent their budget.

The Code of Virginia, (1950), as amended requires that an appropriation exist prior to the expenditure of funds.

The Code of Virginia, (1950), requires that CSA pool expenditures be related to public or private nonresidential or residential services for troubled youths and families. The Auditor of Public Accounts (APA) requires that these expenditures be supported with written contracts or service agreements and an approved amount for the expenditure approved by the local social services board.

The County did not use the Uniform Documentation Inventory to assist the Community Policy and Management Team (CPMT) with development and maintenance of case documentation.

Complexity of the program

The County was unable to provide service agreements or an amount approved for expense by the CPMT for numerous cases.

The County should use the Uniform Documentation Inventory as recommended by CSA.

Management will begin to use the Uniform Documentation Inventory as recommended to ensure proper documentation is available to support CSA pool expenditures.

Twenty five invoices were selected for testing. Fourteen were lacking service agreements and seven were lacking an approval for expenses by the CPMT.

The County has not met the requirements of the Code of Virginia, (1950), as amended.

Management will post additional appropriations to the accounting system and pay closer attention to budgeted and actual expenditures.

The County should budget to include appropriations for all necessary expenditures.

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County of Russell, Vit

‘Schedule of Findings, Responses and Questioned Costs

Year Ended June 30, 2011

Section Il - Financial Statement Findings (continued)

2011-3 Criteria ‘The Code of Virginia, (1950), as amended requires that an appropriation exist prior tothe expenditure of funds.

Condition: The IDA Debt Reduction Fund, VPA Expenditures Fund, Cannery Fund, and Employee Health Insurance Fund overspent the budget. Numerous departments within the General fund also overspent their budget.

Cause of Condition: The County has never posted supplemental appropriations to the accounting system, Effect of Condition: The County has not met the requirements of the Code of Virginia, (1950), as amended Recommendation: The County should budget to include appropriations for all necessary expenditures, Managements Management will post additional appropriations to the accounting system and pay closer attention Response: to budgeted and actual expenditures, 2011-4 Criteria The Code of Virginia, (1950), requires that CSA pool expenditures be related to public or private ‘nonresidential or residential services for troubled youths and families. The Auditor of Public ‘Accounts (APA) requires that these expenditures be supported with written contracts or service agreements and an approved amount for the expenditure approved by the local social services board.

Condition: ‘The County did not use the Uniform Documentation Inventory to assist the Community Policy and Management Team (CPMT) with development and maintenance of case documentation.

Context Twenty five invoices were selected for testing. Fourteen were lacking service agreements and seven were lacking an approval for expenses by the CPMT.

Cause of Condition: Complexity ofthe program Effect of Condition: ‘The County was unable to provide service agreements or an amount approved for expense by the CPMT for numerous cases. Recommendation: The County should use the Uniform Documentation Inventory as recommended by CSA. Managements Management will begin to use the Uniform Documentation Inventory as recommended to ensure Response: proper documentation is available to support CSA pool expenditures.

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County of Russell, Virginia

Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section III - Federal Award Findings and Questioned Costs

2011-5

Statement of Condition:

Criteria:

Context:

Cause:

Effect:

Questioned Costs:

Recommendation:

Management’s Response and

Planned Corrective Actions:

The School Board should review each reimbursement request to determine that it is supported appropriately by allowable expenditures.

Expenditures submitted for reimbursement should be traced to an exact cost and documented appropriately.

Lack of oversight regarding the submission and documenting of costs.

Reimbursement requests are not supported by documentation specifically related to the program.

The School Board will review each reimbursement request to determine that it is supported appropriately by allowable expenditures.

The remainder of this page left blank intentionally.

Twenty-first Century Community Learning Centers - CFDA 84.287 Award Number S287C090047, Award Year 2009

Forty invoices were selected for review. The above instances of noncompliance were noted.

The School Board has $45,482 in questioned costs.

Allowable costs: The School Board charged an entire bill of $12,482 for diesel fuel to the program without using an indirect rate or allocating costs to multiple cost centers. The School Board also charged $33,000 to the program to reimburse the cafeteria for after school snacks without sufficient documentation supporting the request.

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County of Russell, Vit

‘Schedule of Findings, Responses and Questioned Costs

Year Ended June 30, 2011

Section lll - Federal Award Findings and Questioned Costs

20115 ‘Twenty-first Century Community Learning Centers - CFDA 84.287 Award ‘— Number $287C090047, Award Year 2009 Statement of ‘Allowable costs: The School Board charged an entre bill of $12,482 for diesel fuel tothe program Condition: without using an indirect rate or allocating costs to multiple cost centers. The School Board also charged $33,000 to the program to reimburse the cafeteria for after school snacks without sufficient documentation supporting the request. Criteria Expenditures submitted for reimbursement should be traced to an exact cost and documented appropriately. Context Forly invoices were selected for review. The above instances of noncompliance were noted. Cause: Lack of oversight regarding the submission and documenting of costs Effect: Reimbursement requests are not supported by documentation specifically related to the program. Questioned Costs: The School Board has $45,482 in questioned costs. R dat The School Board should review each reimbursement request to determine that itis supported ‘ecommendation: appropriately by allowable expenditures. Management’s Response and The School Board will review each reimbursement request to determine that it is supported Planned Corective appropriately by allowable expenditures. Actions:

The remainder of this page left blank intentionally

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County of Russell, Virginia

Schedule of Findings, Responses and Questioned Costs Year Ended June 30, 2011

Section III - Federal Award Findings and Questioned Costs (continued)

2011-6

Statement of Condition:

Criteria:

Cause:

Effect:

Recommendation:

Management’s Response:

Section IV - Status of Prior Audit Findings and Questioned Costs

Financial Statement Findings 2010-1 and 2010-2 recurred during fiscal year 2011. Federal Award Findings and Questioned Costs 2010-4 recurred during fiscal year 2011. Federal Award Findings and Questioned Costs 2010-3 was corrected.

The School Board should require the contractors and subcontractors to submit weekly certified payrolls and review to ensure they meet the required prevailing wage rate clauses in the agreements.

Davis Bacon Act: The School Board did not receive weekly certified payrolls in conjunction with construction related to the schools.

The Davis Bacon Act requires that all contractors and subcontractors performing federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits.

Although the School Board received signed notifications from contractors agreeing to follow the Davis Bacon Act, without reviewing the certified payrolls as required, there is a likelihood the School Board is not in compliance with the Davis Bacon Act.

ARRA - State Fiscal Stabilization Funds - Education State Grants - CFDA 84.394

The School Board received a form from the Virginia Department of Education that the School Board required contractors to sign to document compliance. The School Board believed this to be the end of their responsibility in relation to the Davis Bacon Act.

The School Board will require the contractors and subcontractors to submit weekly certified payrolls and review to ensure they meet the required prevailing wage rate clauses in the agreements.

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County of Russell, Vit

‘Schedule of Findings, Responses and Questioned Costs

Year Ended June 30, 2011

‘Section Ill - Federal Award Findings and Questioned Costs (continued)

2011-6 ARRA - State Fiscal Stabilization Funds - Education State Grants - CFDA 84.394 Statement of Davis Bacon Act: The School Board did not receive weekly certfied payrolls in conjunction with Condition: construction related to the schools.

Criteria: ‘The Davis Bacon Act requires that all contractors and subcontractors performing federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevaling wage rates and fringe benefits.

The School Board received a form from the Virginia Department of Education that the School Boarc

Cause: required contractors to sign to document compliance. The School Board believed this to be the enc of their responsibit in elation tothe Davis Bacon Act.

Although the School Board received signed notifications from contractors agreeing to follow the Effect Davis Bacon Act, without reviewing the certified payrols as required, there isa ikelnood the ‘School Board is not in compliance with the Davis Bacon Act. The School Board should require the contractors and subcontractors to submit weekly certified Recommendation: payrolls and review to ensure they meet the required prevaling wage rate clauses in the agreements u Cf The School Board wil requir the contractors and subcontractors to submit weekly cerified payrolls Response Sand review to ensure they meet the required prevailing wage rate clauses in the agreements,

Section IV - Status of Prior Audit Findings and Questioned Costs

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Title Page
Table of Contents
Boards & Officials
Independent Auditors' Report
Management's Discussion & Analysis
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
Exhibit 10
Notes to the Financial Statements
Exhibit 11
Exhibit 12
Exhibit 13
Exhibit 14
Exhibit 15
Exhibit 16
Exhibit 17
Exhibit 18
Exhibit 19
Exhibit 20
Schedule 1
Schedule 2
Other Statistical Section
Government Auditing Standards Opinion
A-133 Opinion
Schedule of Expenditures of Federal Awards
Schedule of Findings, Responses, and Questioned Costs

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